The department of labor released their November job loss figures this week boasting a decline in the number of new unemployment benefit claims continuing a five-week trend (see the press release). The immediate response from investors in real estate who were wishing for any sign of good news in this murky economy is a sigh of relief – we are on the mend!
A decrease in claims means that more companies are adding new employees than they are letting go, and thus it appears the job market is improving. Commercial real estate owners nationwide likely view an improved job market as a sign that vacancy rates will decline, companies are more financially strong, and values will level out or even begin to increase. As shown in previous economic downturns, as joblessness decreases, the result is an increase in rental rates and occupancy rates. Continue reading →