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Daily Real Estate News | July 5, 2007 |
Office Rents Get Pricier Across the Country
Office rents have jumped an average of 3.1 percent nationwide during the second quarter, up from gains of 2.8 percent in the first quarter and 2.1 percent in the year-earlier period, according to real estate research firm Reis Inc.
This was the largest quarterly increase since the third quarter of 2000, before the combined effects of the technology-stock bust and the Sept. 11, 2001 terrorist attacks caused office vacancies to rise and rental rates to fall.
In cities like New York and Washington, growing businesses are hiring more people and fueling demand for space. In Boston and San Francisco, investment companies are acquiring property and pushing up rents.
In the strongest markets, which include Seattle, west Los Angeles, New York, and Washington, fewer new office buildings are being built because of a scarcity of land and rising construction costs.
Rents aren’t high everywhere, particularly in the Midwest. For example, in Chicago, they're slightly below what they were in 2000 because there are so many new office buildings seeking tenants.
Source: The Wall Street Journal, Jennifer S. Forsyth (07/05/2007)
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