Apr 4
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!
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Apr 1
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.
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Mar 29
According to a recent report by CB Richard Ellis, Canada's national office space vacancy rate is a healthy 9.3%, down from 10.1% a year earlier. That compared with the US office space vacancy rate of around 17% is a very healthy market. The big difference is in that the Canadian's have a Landlord controlled market, whereas the US is a Tenant's market.
First Quarter Vacancy rates in Major Canadian markets:
Source
Canadian Office Space Market Information
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Mar 19
Thinking about moving to a warmer climate? Here is what our Hawaii Local OfficeFinder Member tells us about the Honolulu Office Space Market:
The Honolulu office market ended 2010 by continuing its occupancy slide. Nine of the last ten quarters have seen negative absorption. The 4th quarter saw 61,382 square feet of negative absorption bringing the 2010 total to negative 216,997 square feet. Vacancy increased to 12.1% vacant, 0.6% higher than the previous quarter and 1.9% higher than the same time in 2009. The islandwide average asking full service gross rent increased $0.03 during the quarter to $2.99/sf/mth. Operating expenses, which are included in the gross rent figure, decreased by $0.02 to $1.26/sf/mth. Asking base rent increased by $0.05/sf/mth during Honolulu CBD Class A Office Snapshot - 4th Quarter, 2010 the quarter, however the spread between asking and taking base rents is larger than in recent memory.
Weak Job Growth and Limited Tenant Demand
Although job growth turned positive in the 3rd quarter of 2010, it is forecast to remain weak through 2011. Because of a relentless push to reduce costs including rent, most businesses are putting more people in fewer square feet. The result is that the market needs slight job growth to offset this effect.
A 12% vacancy rate is a lot better than many other office markets!
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Mar 2
According to their 2011 U.S. Macro Forecast report by Cassidy Turley from the WSJ, Shadow office space has been affecting the office space for lease recovery already.
In the article, "The U.S. office sector needs to absorb 126 million square feet of
empty space to return to pre-recession vacancy levels, the forecast
says. The number of “office-using jobs” created last year should have
resulted in 53.1 million square feet of office absorption for 2010. But,
because of shadow space, only 18 million square feet of space was
absorbed for the year.
But the report says the drag of shadow space will be less severe this
year, and vacancy rate will move down (it was 16.7% in the fourth
quarter). Still, vacancy won’t reach pre-recession levels — between
12.5% and 13% — before 2014. And rents will remain where they are now
for another two years."
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