Certain parts of the country are struggling with a decline in commercial rent while others are seeing steadied vacancy rates, according to the Federal Reserve Board's latest Beige Book
Based on information collected through Aug. 31, the rent on commercial properties has declined in Boston, Chicago, New York and Philadelphia. Vacancy rates held steady in Boston and Kansas City and rates increased in Atlanta, Philadelphia, San Francisco, and Richmond, Va.
Rent concessions were reported in the San Francisco and Richmond markets with the latter noting that some landlords had postponed property improvements in an effort to conserve cash. Construction remained at very low levels, with modest improvements noted in public construction in the Chicago, Cleveland, and Minneapolis districts.
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According to the Fed, commercial and industrial lending declined in the Philadelphia and Kansas City regions, but was steady in Richmond. The lack of available credit was cited as an issue for both residential and commercial contractors in Cleveland and for commercial real estate borrowers in Atlanta. San Francisco reported an increase in venture capital investment.
The deterioration of credit quality continues to be widespread with a few exceptions. Cleveland and Chicago reported some improvement while Philadelphia, Richmond, Dallas, and San Francisco continue to experience an erosion of credit quality.
The 12 Federal Reserve districts are Boston, New York, Philadelphia, Cleveland, Richmond, Va., Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.
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