CME Group spotlights the growing vacancy trend in commercial real estate
CME Group said Tuesday that if there is any pressure in the real estate market, it will be found in the commercial space, with vacancy in that category climbing above 20%.
The Chicago-based firm noted that in the U.S., vacancy levels within the commercial real estate division have increased to more than 20% in Q2 of 2023 which marks a notable jump since the beginning of 2019, when vacancy rates sat at 12.5%.
“Many of the builders and owners of these properties borrowed money at a time when the Federal Reserve had interest rates at zero. Fed fund rates are now at nearly 5%, so not only are vacancy rates up, but so is the cost of financing,” CME Group said in a recent note.
Commercial real estate vacancy is rising in the United Kingdom as well. The figure climbed to 8.6% from 4.3% in less than three years, all while the Bank of England has increased interest rates to more than 4%.
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