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Daily Real Estate News | July 3, 2008 |
Office Rents Flatten, Vacancies Creep Up
Rents for U.S. office space have stalled, rising 0.7 percent in the second quarter to $25.16 a square foot, according to real estate research firm Reis.
At an annualized rate, rents are growing just 2.9 percent, a fraction of the 10.6 percent seen last year. The vacancy rate rose slightly, up 0.2 percent to 13 percent, the highest rate in more than a year.
Although the weakening rental rates and rising vacancies are modest compared with the downturn after the dot.com bust, Reis sees the trend as problematic.
With inflation running roughly 1 percent a quarter, rent growth is effectively wiped out. "Landlords are having to concede ground on rents and tenant improvements," says Sam Chandan, Reis's chief economist. "The balance is tipping in the favor of tenants in many markets."
Source: Reuters News, Ilaina Jones (07/03/2008)
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