According to two reports, one by Cushman & Wakefield and the other by Marcus & Millichap, office space rental rates will begin to rise again by the end of 2011 or early 2012. The increase in office rental rates will not be across the board, but uneven throughout the country. Markets that will see the biggest increases in office rental rates are expected to be Washington DC, San Francisco and Midtown Manhattan. The reason; improving employment and limited new construction. According to Marcus & Millichap less than 20 million square feet of
new supply is scheduled to come on line throughout the US in 2011. More confirmation that the bottom of the market is here. For tenants wanting to make sure they can take advantage of the low office rental rates, now is the time to either renew, renegotiate of relocate to get the best possible office rental rates. Contact us if you would like the assitance of a top local tenant rep. We'd be happy to help!
The Real Deal March 31, 2011
Office rents and absorption will rise over the next two years in urban
and suburban business districts, according to Cushman & Wakefield's
office market forecast released today. Though office rents remain low in
the U.S., the report determined that a lack of new supply coupled with
rising demand will force rents upward in half of all central business
districts - or urban business centers - by 2013. And while 2010 saw
just 2.2 million square feet absorbed in cities, by 2012 that number
should grow more than six-fold to 13.9 million square feet. New York
City will lead the charge, along with Washington D.C., Boston, Seattle
and Chicago, as those areas will combine to account for nearly
two-thirds of that space. Suburban office vacancies will also decline
between now and 2013, but at a slower rate than those of central
business districts. Almost half of all suburban markets will see office
rent declines between now and 2013, and five areas - including Miami -
will see office rents dip below 2010 bottoms.
According to a study by Studley Inc, asking rents for buildings at the one-time mecca of global finance have
fallen to among the lowest in Manhattan after ranking as some of the
priciest as recently as 2008. Wall Street landlords are seeking rates
about 18% less than the city average, hurt by years of exodus by
financial firms looking for bigger, more modern offices.
Good news regarding the office space market seems to be abundant now-a-days. I was just reviewing my Google alerts for office vacancy and office space and came across quite a few positive headlines. Here are a few:
ShareThis
