TEXT OF STORY
SCOTT JAGOW: Yesterday we told you that private equity firm Blackstone Group would buy the country’s biggest office building company. But then we got to thinking, isn’t this a bad time to own property? Stacey Vanek-Smith reports.
STACEY VANEK-SMITH: We’ve heard a lot about the rough ride the real estate’s been having. That’s true for residential housing, but as far as commercial real estate’s concerned, it’s been smooth sailing.
This year, new home sale prices have been down more than 10 percent compared to last year. At the same time, office rents have jumped an estimated 6 percent nationwide for cut-throat markets like New York, that number is as high as 15 percent.
And then there’s the apartment rental business.
Lou Taylor is a real estate analyst for Deutsche Bank.
LOU TAYLOR: We’ve had rising rents and rising occupancy rates. You know, people that are nervous about the outlook for single-family homes have delayed purchases and stayed in apartments longer. Plus there’s been a real dearth of new apartment construction, so the apartment business is very, very good.
Analysts predict demand for office space will continue to grow as long as the economy expands.
As for apartments? As long as interest rates don’t drop, analysts expect rents will continue to rise.
I’m Stacey Vanek-Smith for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.