Consumer Spending Boosts Some Real Estate Values.

New York -- Property sectors driven by consumer spending - multifamily and retail - remain strong while those tied more to the corporate side - office and industrial - lag, although they continue to recover, Moody's Investors Service says in its commercial real estate market report for the third quarter of 2004.

The multifamily sector remains strong, and Moody's has designated 51 of the 59 multifamily markets the rating agency tracks as green markets, each scoring in the highest range of 67-100.

As well, Moody's reports that the multifamily vacancy rate is down to 5.8% for the third quarter of 2004, from 6.0% in the second quarter of the year.

Neighborhood and community shopping centers are also strong, with a composite sector score of 83 for the third consecutive quarter, Moody's reports.

Moreover, the rating agency sees restrained construction in the sector.

Sally Gordon, a Moody's analyst/vice president and co-author of the report, said, "The composite square feet of community shopping center space per capita also remains unchanged at 10.7, as does the one-year forward estimate of new supply at 1.7% of existing inventory."

In the office sector, the rating agency is seeing a narrowing of the differential between downtown and suburban office markets, with downtown scores seeing a decline and suburban office scores gaining.