PROVIDENCE – Despite the general weakness in the residential real estate market, Rhode Island’s commercial market, “and the downtown Providence market in particular, remain very appealing to investors, primarily from outside the state,” said The Rodman Report for 2007, released today.

While transactions in Rhode Island’s commercial real estate market grew last year, the number of industrial transactions dropped by more than half. Still, both markets are expected to see “stability overall” during 2008, according to the report.

Compiled by Providence’s Rodman Real Estate, the report says the state’s commercial market enjoyed a 43-percent increase in the number of transactions – 48 – in 2007 compared with 2006. The greater number of transactions yielded sales of $108.6 million, a total that was $76 million higher than the previous year.

The report attributes the lack of industrial real estate growth – in dollar volume and number of transactions, both of which shrank during 2007 – to the “state’s ongoing transition from a manufacturing-based economy to a service-based economy.”

The 40 sales of industrial properties during 2007 were only 42.6 percent of the 94 sales during 2006. But their average square footage was larger – with eight sales larger than 60,000 square feet. Those eight sales accounted for $50.9 million of the total $56 million in industrial sales, according to the report. There were $66.7 million in industrial sales during 2006, according to the report.

Looking to the future, the report predicts that the 2008 commercial market will “still be primarily driven by need-based owner occupants, but we see some movement toward leasing due to a continued lack of product and tightening in lending standards.”

The Rodman Report, 2007 – a statewide survey of the commercial real estate market – was produced by Rodman Real Estate Inc. of Providence based on data from sources including CoStar Group and Loopnet online services. For additional information, including annual survey reports dating back to 2003, visit www.rodmanrealestate.com.