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Entries Tagged as 'Washington DC Office Space'

The Nation's Strongest Economies

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POLICOM releases annual rankings for the 366 metropolitan areas and 576 so-called micropolitan areas nationwide.

The Top Ten Economies

1.Seattle-Tacoma-Bellevue, Wash.
2. Washington Metropolitan Area
3. Denver-Aurora-Broomfield, Colo.
4. Houston-Sugar Land-Baytown, Texas
5. Sacramento-Arden-Arcade-Roseville, Calif.
6. Salt Lake City
7. Des Moines-West Des Moines, Iowa
8. San Diego-Carlsbad-San Marcos, Calif.
9. Madison, Wis.
10. Dallas-Fort Worth-Arlington, Texas

With their stronger economies, these are the office space markets that we would expect to lead the recovery.

Dallas Office Space , Houston Office Space , San Diego Office Space , Seattle Office Space , Washington DC Office Space

Jones Lang LaSalle Predicts mid 2010 CRE Recovery

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Washington Business Journal Thursday, November 19, 2009: The initial U.S. commercial real estate recovery is likely to begin in the second half of next year, according to Jones Lang LaSalle’s 2010 forecast.

Nationally, leasing demand levels are expected to bottom out this quarter and remain stagnant next year. And national office vacancy are expected to near 20 percent by late 2010.

D.C., which has a 12.3 percent vacancy rate that includes sublease space, is expected to come close to topping out at about 15 percent before stabilizing, said John Sikaitis, research manager in the D.C. office of JLL.

“We have significant supply issues with a large development pipeline but significant demand with the government looking to mitigate the problem,” said Sikaitis.

Expected boosts in the federal budget will continue to cushion the D.C. office market and shift absorption back into positive territory in 2010.

But the continued delivery of speculative construction projects in the area is expected to force vacancy rates further upward and keep leverage squarely with tenants, said JLL.

The D.C. area’s 15.5 percent vacancy rate is expected to escalate to 17 percent by the end of 2010.

Northern Virginia’s rate of 16.5 percent is expected to go up slightly to 17.2 percent and in suburban Maryland, its 18.5 percent rate is expected to go up to north of 19 percent, added Sikaitis.

One region that’s fairly tight, he said, is the Rosslyn-Ballston corridor which “outperforms the rest of the region” based on the lack of development activity and tenant demand from D.C. and areas outside the beltway.

Rental rates are expected to keep dropping through the first half of 2010 but will stabilize in the third quarter due to pent-up federal demand soaking up large blocks of vacancy in the market, said JLL.

The region’s asking rents have already come down about 12 percent since the height was established at the beginning of 2008, he said. Effective rates -- which includes rental concessions -- have come down even further, at 20 percent, and are expected to see a 25 percent decline.
End article

It looks like conditions will get really ugly in the DC area before a turnaround, even if JLL is correct on a recovery mid 2010.

Office Rental , Office Space , Office Vacancy Rate , Washington DC Office Space

National Office Vacancy at 15.2% and rising

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A recent article in the Wall Street Journal reports that office vacancy has reached 15.2% and is expected to continue rising to 19.3% over the next year. The data comes from REIS, Inc a provider of commercial real estate performance and analysis data for over 25 years. Over 25 million square feet were returned to the market in the first quarter of 2009 driving vacancy rates up and rents down. "Effective rents, which include free rent and other landlord concessions, fell 2% in the first quarter to a national average of $24.16, the largest drop since the first quarter of 2002, according to REIS. Sublet space, on average, is going for between 10% and 15% less than what landlords are charging."

It is a great market for tenant looking for space or renewing during the next 12 months.  Smart Landlords cutting deals to keep their buildings full during this downturn providing tenants a great opportunity.

Markets such as Houston and Washington DC, with less exposure to financial services, is weathering the downturn better than others like New York City. The vacancy rate in New York increased two percentage points in one quarter, from 8% to 10.2% and rents dropped over 5% to $52.00 per square foot, still over double the national average.

How can you, as a tenant, take advantage of this opportunity? Make sure you get professional assistance. OfficeFinder tenant representative specialists can provide you the answers to your questions and help you find and negotiate (or re-negotiate) a great deal. There is no obligation to contact them and there is usually no cost to you for their services. Request a contact.

Houston Office Space , Lease Negotiations , Manhattan Office Space , Office Relocation , Office Space , Tenant Representation , Washington DC Office Space

TARP Program Signs a 10 Year Lease In DC

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Interestingly enough, I just learned about this from a Twitter post. "@BabyStew: Jeebus. The TARP program signed a 10-year lease on office space in DC. Just how long does Obama think this recession's gonna last?" My first reaction went along the same lines.  The reality is that Getting the money back from the TARP beneficiaries is going to take a really long time. Hence, the 10 yr lease

According to the Washington Post March 2, 2009

The General Services Administration said it has signed a lease for 71,000 square feet at 1801 L St. NW for use by the Troubled Assets Relief Program.

Space for TARP offices had been leased in buildings near the Treasury Department and more permanent space had been expected, according to a GSA spokesman.

About 200 people are likely to occupy the space on L Street, for which the GSA is paying about $39 a square foot.

Some brokers and developers are hoping that the program creates demand for more square footage and helps to soften the blow of a glut of office space on the market.

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General , Office Space , Twitter , Washington DC Office Space

Office Space Forecast for 2009 Gloomy

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Cushman and Wakefield recently published their Winter 2009 Office Space Forecast and it's not a pretty picture. Basically, it is what we would expect with this economy.  Office space occupancy in the CBDs will continue to deteriorate due to employment reductions throughout the the US. This will occur even as the economy starts it's rebound. 

No surprise that they are also predicting sublease space offerings to continue their uptrend.

According to the report, rental rates will begin their descent and bottom out by year end 2010. With vacancies increasing they are predicting that the gains made in rental rates over the past 3 years will be wiped out.

"Manhattan, San Francisco and Orange County CA could see rates dropping as much as 20.0% from 2008 levels. Meanwhile, energy-producing markets like Houston will remain bright spots (though not necessarily for long if oil and gas prices continue to fall), as they are expected to eke out modest rent gains throughout this economic downturn." They also predict that Boston, Philadelphia, Washington, DC and Seattle will weather the current downturn much better than other markets. While new York and New Jersey are expected to be the weakest and slowest to recover.

C & W Winter 2009 Forecast (pdf)

 

Houston Office Space , Manhattan Office Space , Office Space , Washington DC Office Space