Reis's look at the preliminary data for the office, retail and multifamily sectors in the first quarter of 2013 shows fundamentals continuing to improve. Vacancy rates are falling, asking and effective rents are up, completions are at low levels and every sector has posted positive absorption numbers for many quarters in a row.

Apartment Completions and Absorption

Reis estimates that 13,706 multifamily units were completed in the first quarter of 2013 in the 79 markets it tracks. That’s the lowest level since the first quarter of 2012 and less than half the 28,285 units delivered in the fourth quarter of 2012. Completions in the sector remain well below the average of 29,767 units delivered per quarter from 2008 through 2010. The sector posted absorption of 36,216 units in the first quarter. It is the 16th consecutive quarter with positive absorption.

Apartment Vacancy Rates and Rents

Reis estimates that the national apartment vacancy rate fell 20 basis points in the first quarter to 4.3 percent. It is now 470 basis points lower than the peak of 8.0 percent reached in the fourth quarter of 2009 and the first quarter of 2010. Asking rents and effective rents each rose $5 to $1,102 and $1,054 respectively. The spread of $48 matches the low reached in the fourth quarter of 2012 and is down from a peak of $65 in the second quarter of 2009. Reis also reported that 67 of the 79 markets it tracks posted decreases in vacancies. Asking and effective rent growth, however, have slowed. Both asking and effective rents rose by only 0.5 percent, the slowest rate of growth since the fourth quarter of 2011.

Office Completions and Absorption

Reis estimates that 1.58 million sq. ft. of office space was completed in the first quarter of 2013 in the 79 markets it tracks. That’s down from 3.35 million sq. ft. in the fourth quarter of 2012 and less than 10 percent of the 18.85 million sq. ft. delivered in the fourth quarter of 2008. The sector posted absorption of 4.02 million sq. ft. in the first quarter—more than the 3.32 million sq. ft. of absorption in the fourth quarter of 2012. The sector has had positive absorption for nine straight quarters with an average figure of 4.32 million sq. ft.

Office Vacancy Rates and Rents

Reis estimates that the national office vacancy rate fell 10 basis points in the first quarter to 17.0 percent. It is now 60 basis points lower than the peak of 17.6 percent reached in late 2010 and early 2011, but 450 basis points above the cyclical low. Asking rents rose to $28.66 per sq. ft. and $23.15 per sq. ft., respectively. Asking and effective rents both grew by 0.7 percent during the first quarter. While this represents a slight slowdown over the prior quarter’s growth rate of 0.8% for both asking and effective rents, a rise of 0.7 percent is above the quarterly average of about 0.4 percent since rents began rising consistently in the fourth quarter of 2010. Asking and effective rents have now risen for 10 consecutive quarters. National effective rents, however, are still about 7.7 percent below peak levels observed in the second quarter of 2008.

Neighborhood and Community Center Completions and Absorption

Reis estimates that 873,000 sq. ft. of neighborhood and community center space was completed in the first quarter of 2013 in the 79 markets it tracks. That’s down from 1.23 million sq. ft. in the fourth quarter of 2012 and down from a peak of 8.13 million sq. ft. delivered in the fourth quarter of 2008. The sector posted absorption of 2.73 million sq. ft. in the first quarter—a slight increase from the 2.68 million sq. ft. of absorption in the fourth quarter of 2012. The sector has had positive absorption in 10 of the last 11 quarters with an average figure of 1.78 million sq. ft.

Neighborhood and Community Center Vacancy Rates and Rents

Reis estimates that the national neighborhood and community center vacancy rate fell 10 basis points in the first quarter to 10.6 percent. It is now 50 basis points lower than the peak of 11.1 percent reached in third quarter of 2011, but 390 basis points above the 6.7 percent level reached in the second quarter of 2005. Asking rents rose to $19.13 per sq. ft. and $16.63 per sq. ft., respectively. Asking and effective rents both grew by 0.3 percent during the quarter. It was the sixth consecutive quarter that both asking and effective rents have increased.

Regional Mall Vacancy Rates and Rents

Reis estimates that the national regional mall vacancy rate fell 30 basis points in the first quarter to 8.3 percent. It is now 110 basis points below the peak of 9.4 percent reached in the third quarter of 2011. It is 340 basis points above the low of 4.9 percent reached in the second quarter of 2001. Asking rents rose to $39.46 per sq. ft. and have now risen in nine of the last 10 quarters and just $1.16 per sq. ft. below the peak reached in the third quarter of 2008. The 0.4 percent asking rent increase is the largest since the first quarter of 2008. According to Ries, the recovery in the mall subsector is being driven by class-A malls, which typically boast luxury retailers and cater to affluent consumers. The remainder of the mall sector continues to struggle.