Fed issues Beige Book Survey Finds Continued Weakness in Commercial Real Estate

Reviewing the Beige Book gives an indication of the economy and, especially, the Fed's viewpoint on it....It should be good reading for all....


Fed Survey Finds Continued Weakness in Commercial Real Estate
Wednesday, 13 January 2010
Commercial Real Estate Direct Staff Report

Commercial real estate remains weak throughout the country, according to the Federal Reserve's beige book survey of its 12 districts.

The Fed, which surveys its district offices eight times a year and reports its findings in what is commonly referred to as its Beige Book, said conditions in non-residential markets in each of its districts "remained soft," with some district offices, namely New York, Philadelphia, Kansas City and San Francisco, reporting declines in demand for commercial and industrial space. The bank's Richmond, Va., district office reported that leasing of office and retail space appeared to have "picked up."

But as data from various providers has shown, vacancy rates have continued to climb, while rents have fallen across the board. The Fed noted that some of its district offices had reported that tenants were now able to extend existing leases at low rents and with allowances as property owners strived to retain their tenants.

The Fed said that economic conditions overall had "improved modestly," but remained at low levels.

For a copy of the full report, go to: http://www.federalreserve.gov/FOMC/BeigeBook/2010/20100113/fullreport20100113.pdf