 |
||||||
| Friday, November 20, 2009 |
Contact Us
|
 RSS
|
|||||
|
|
| |
|||
|
||||||
|
||||||
|
|
ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
|
|
|
|
April 18, 2008 2:52 PM ET
Office vacancies rose sharply in the first quarter, a trend that is expected to continue as a result of layoffs and new construction adding to supply. According to the real estate services firm Grubb & Ellis, first-quarter office vacancies rose to an average 13.6% nationally, up from 13% in the previous three quarters. “With demand turning negative at the same time that the construction pipeline will deliver the 94 million square feet still underway, vacancy is expected to peak at 18% by the end of 2009,” Grubb & Ellis economist Robert Bach wrote in a research note today. The recession’s impact on employee levels “is just getting started, so the office market is reacting pretty quickly and I would suspect that it will rise to a vacancy rate of 15% to 16% by year end,” he said in an interview Mr. Bach expects that by the end of 2009, vacancies will peak at about 18%, a level that was seen in the last two economic downturns, during the first quarter of 2004 and the third quarter of 1991. In addition, about 15.1 million square feet of new construction was completed during the first quarter. But net absorption—the amount of new space coming to market that found tenants—came in at a slim 1.8 million square feet. That’s the lowest rate of absorption since the second quarter of 2003, Grubb & Ellis said. Of the 57 markets tracked by Grubb & Ellis, vacancies rose in 42 locales and fell in 15. Among the major office markets, New York City had the lowest vacancy rate at 4.9% and Detroit, home to the troubled auto industry, had the highest at 22%. Rapidly rising vacancy rates mean those seeking new space or facing renewals will be in the driver’s seat in negotiating new rates, Grubb & Ellis said. “Landlords will need to focus on property management, work to retain tenants and get aggressive to fill vacancies early in the cycle rather than chase the market lower.” At the end of the quarter, the average asking rental rate for Class A space was $35.44 per square foot. B space averaged $26.60 per square foot per year gross, down slightly from the fourth quarter of 2007. The outlook for a continued softening in rates will have a negative impact on property values as the office investment sector turns into a buyers market. “Expect more properties to come on the market in 2008, including distressed sales, which will create the best buying opportunity in years for investors with cash to spend,” said Grubb & Ellis. “A windfall of equity capital and generously priced debt capital rescued commercial real estate in the last recession, but the still-dysfunctional capital markets are in no position to repeat that performance in the current downturn.” “If you are a property owner, there probably is more pain to be felt if you’re trying to sell,” Mr. Bach said.
|
|
|
|
CRAIN'S BENEFITS OUTLOOK 2009
SPECIAL REPORT
MOST POPULAR
|
MORE ANALYSIS
Crain Financial Group:
InvestmentNews |
Pensions & Investments |
Workforce Management
Copyright ©2009 Crain Communications Inc
All rights reserved.
Privacy Policy |
Terms & Conditions