Commercial Real Estate Outlook - Office space
According to the latest Commercial Real Estate Outlook by the National Association of Realtors, many office space users are relocating their operations into newer class A type property raising vacancy rates in older class B and class C buildings. In addition, employers are using space more efficiently and speculative new construction is being held in-check.
According to the report, office vacancies are expected to rise to an average of 13.9 percent by the end of the year from 12.6 percent in the fourth quarter of 2006. Annual rent growth in the office sector is forecast at 3.2 percent in 2007, following a 5.2 percent gain last year. Estimates for the first quarter show areas with the lowest office vacancies include New York City; Seattle; Honolulu; Orange County, Calif.; Washington, D.C., and Miami, all with vacancy rates of 9.7 percent or less.
Overall net absorption of office space in the 56 markets tracked by the study, which includes the leasing of new space coming on the market as well as space in existing properties, is projected to be 21.9 million square feet this year, down from 76.2 million in 2006. Office building transaction volume set a record of $133.6 billion trading hands last year, up 32 percent from 2005.
According to the report, office vacancies are expected to rise to an average of 13.9 percent by the end of the year from 12.6 percent in the fourth quarter of 2006. Annual rent growth in the office sector is forecast at 3.2 percent in 2007, following a 5.2 percent gain last year. Estimates for the first quarter show areas with the lowest office vacancies include New York City; Seattle; Honolulu; Orange County, Calif.; Washington, D.C., and Miami, all with vacancy rates of 9.7 percent or less.
Overall net absorption of office space in the 56 markets tracked by the study, which includes the leasing of new space coming on the market as well as space in existing properties, is projected to be 21.9 million square feet this year, down from 76.2 million in 2006. Office building transaction volume set a record of $133.6 billion trading hands last year, up 32 percent from 2005.
posted by CFCB at
7:51 PM
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