Entries Tagged as 'Washington DC Office Space'
A recent article on Bloomberg.com discussed the impact of "Shadow Space" on the recovery of the office space market. The officeFinder Blog discussed the affect of "Shadow Space" on the market back in April 2010. We defined it as "Shadow Office Space is office space that is currently under lease by a
tenant, but which is not being used due to layoff of employees." Here is what the Bloomberg article had to say:
"The U.S. office sector will be the
slowest to recover as companies absorb empty space and advances
in technology reduce the need for square footage, said Kenneth Rosen, a professor at the University of California, Berkeley.
Unoccupied “shadow inventory” accounts for 3 percent to 5
percent of total business leases, and that space will be filled
before firms sign new rental agreements, Rosen, chairman of
Berkeley’s Fisher Center for Real Estate and Urban Economics,
said at a conference in San Francisco. Cloud computing and other
tech advances let employees work away from offices, further
reducing space needs, he said.
“Every company has shadow space,” Rosen, who also runs
Berkeley-based hedge fund Rosen Real Estate Securities LLC, said
in an interview yesterday. Most U.S. cities face prolonged
vacancies because of the surplus, excepting Washington, New
York, San Francisco, Boston and parts of the Silicon Valley,
where technology and venture capital spur leasing, he said."
Boston Office Space , New York Office Space , Office Space , San Francisco Office Space , Silicon Valley Office Space , Washington DC Office Space
According to a recent report from Colliers International, it appears that the U.S. office space market has turned the corner and absorbed 6.5 million square feet of office space during the third quarter of 2010 compared to only 1.8 million sq. ft. of absorption activity for the previous quarter.
It was the major office space markets that showed the largest office leasing absorption for the quarter. Among those, the Washington, DC office space market showed over 882,000 square feet of net absorption during the quarter, resulting in an office space vacancy rate of only 11.6%, the lowest in the nation. The Washington, DC office rental rate increased to $52.32 per square foot, an increase of $1.06 over the previous quarter. The rental rate and absorption gains are mostly due to the addition of new government jobs and a limited supply of new office space coming on line during the quarter.
Also of interest, during the 3rd quarter the amount of sublease office space nationally continued to decrease, to only 7.6%of total office space vacancy compared with 8.2% at the end of the 2nd quarter.
The national office space vacancy rate decreased slightly from 16.3%to 16.2% during the third quarter, but it still is above the 16% at the end of the 3rd quarter 2009.
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Lease Negotiations , Office Space , Office Vacancy Rate , Sublease Office Space , Washington DC Office Space
In a recent article in Inc Magazine, Office Space in Washington DC won the most expensive office rental in the US award at an average rate of just under $49.00 per square foot. New York City Office Space was second at $48.53 per square foot. For comparison, the national average is $21.25 per square foot.
The national office space vacancy rate improved to 16.8%
Read more at Inc Magazine
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Manhattan Office Space , New York Office Space , Office Vacancy Rate , Washington DC Office Space
It seems as though it has been a couple of weeks of good news for the US office space market. CoStar has just come out with their State of the U.S. Office Market: Mid-Year 2010 Review & Forecast.According to their study, office space vacancy rates have stabilized and office vacancy rates that appear to have peaked and are no longer on the rise .
A few notable points from the report:
Office job growth has spurred positive net Office Space absorption. Office Vacancy Rates have peaked with some office markets even reporting Increases in average office Rents.
Of the 20 largest office markets, eight of them posted positive net absorption so far this year, three of them had little or no change, but nine did post negative net absorption. Washington DC led the country with 2 million square feet of net absorption followed by Denver with 1.6 million and Minneapolis with 1.3 million. New York City had 2.8 million square feet of negative net absorption, Los Angeles with a negative 2 million and Philadelphia at negative 1 million. But even the markets experiencing negative absorption were doing so at much reduced levels compared with last year.
New York, Long Island and Minneapolis office space markets are all now reporting single-digit office space vacancy rates of 9% or less.
If the current pace of office space absorption and delivery trends hold, CoStar projects the office vacancy rate will go from 13.6% to less than 11% sometime in 2013.
From a commercial real estate perspective, as long as you have any net job growth, it is eating away at the vacancies out there. The most important thing here is that this positive employment growth in the office sector will be reducing standing inventories of (available) space.
Denver Office Space , Los Angeles Office Space , Manhattan Office Space , Minneapolis Office Space , New York Office Space , Office Space , Philiadelphia Office Space , Washington DC Office Space
This is the second recent report of positive news in the Office Space arena. Just a few days ago we posted Office Space Vacancy Rates in US CBDs Fall Slightly, now this. Hopefully it will be the first few of more to come.
WASHINGTON, July 12 /PRNewswire/ -- For the first time in two years, the demand for office space exceeded what was returned to the market, according to Cassidy Turley's latest National Office Trends Report.
Manhattan Office Space , New York Office Space , Office Space , Office Vacancy Rate , Washington DC Office Space
Cassidy Turley reports that with demand up, national office vacancy rates remained flat when compared to the previous quarter at 16.9%. Still, this is the highest vacancy has been since 1993. Of the 80 major metros tracked, 40 posted increases in vacancy and 35 markets posted declines.
According to the report, national rents are stabilizing, but not appreciating. Average asking rents fell slightly, down $0.17 compared to the pervious quarter, to register at $21.56 in the second quarter of 2010.
"In terms of recovery in the office market sector the fundamentals have improved, the demand has improved - especially in Washington, DC, New York City, and pockets of California," said Kevin Thorpe, Chief Economist at Cassidy Turley. "These are the segments of the market that are clearly outperforming the rest of the country. Investors are targeting quality assets in these markets and pricing has moved up dramatically from the low point it hit in 2009."
According to Cassidy Turley, the U.S. economy created 116,000 office-using jobs in the second quarter of 2010. However, recent economic data suggests that the economy may be losing steam as we enter into the second half of 2010. Private sector job creation, in particular, has been disappointing in the May and June employment reports. Even under bullish economic scenarios, unemployment will not reach pre-recession levels prior to 2013.
Cassidy Turley reports that U.S. office sales volume is up 39% compared to this same period one year-ago – at $7.42 billion. Net absorption was positive 6.6 million square feet in the second quarter of 2010, marking the first period of positive demand since the first quarter of 2008.
The report also finds that the development pipeline has slowed dramatically. There is currently 32.8 million square feet under construction, compared to 41 million square feet delivered in 2009 and 61.1 million square feet delivered in 2008.
"The growing uncertainty regarding the recovery and surrounding the regulatory environment will slow the recovery in the office sector, but it will not derail it," added Mr. Thorpe. "Office-using job growth will continue to be slow in 2010, but as businesses regain confidence in the self-sustaining expansion, hiring will pick up in greater numbers in 2011 in order to keep pace with growing demand. For the office market, 2010 will be the year of positive demand for office space, 2011 will be the year of stabilizing vacancy, and 2012 will be the year of rental appreciation."