Multifamily market to lead recovery in commercial real estate

The National Association of Realtors says that the commercial real estate market should see slow improvements next year, led by gains made in the multifamily housing segment.

According to the report, the officer and industrial markets should see falling vacancy rates next year, although rents will continue to fall slightly as demand still remains somewhat low. However, multifamily properties should see vacancies continue to tighten, while rents should increase by 1.4 percent nationwide.

"Multifamily housing is the one commercial sector that has held on relatively well in the past year, and can expect the best performance in 2011," said Lawrence Yun, NAR chief economist.

The worst performing part of the market next year, according to the report, should be the retail segment. Vacancies and rents in that portion of the market should remain relatively level through next year.

Multifamily properties in the Houston real estate market is also showing improvements over the past several months. According to the latest report from Marcus & Millichap Real Estate Investment Services, many local property owners are set to remove incentives due to increased demand, Citybizlist reports.