Commercial Office Space News

A great article about the plight of the Seattle office space market highlights the fact that the Seattle office space situation will get worse before improvements are shown.

Lets hope that the downturn isnt as bad as predicted, but great article from Dan Richman.

The office vacancy rate is above 10% in nearly every US city which could cause another round of problem for the banks, experts say. The increasing unemployment has meant that more and more empty space is being created, weakening commercial property rental income and values. The Urban Land Institute says that 2009 will be the worst year for US commercial property since the early 1990′s.

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The vacancy rate in Atlanta continued to rise in Q4 in 2008 as the credit crunch and global economic slowdown adversely effect commercial activity in the City. Unsurprisingly it is the premium, class A Atlanta office space which is seeing the vacancy rate climbing the fastest.

Net absorption is also still struggling , in Q3 office absorption fell by 416,000 sq ft. One of the key factors creating the negative absorption and increasing vacancy rate is the newly created quarter of a million square feet of sublease space that came onto the market.

The New York office market has taken a battering in recent times. With financial companies scaling back workspace, rents have flatlined and look certain to fall in the next 18 months. The state of the New York Office market relies heavily on the banking sector. Around 36% of the approximately 391 million square feet of total stock is occupied by financial institutions.

By the end of February 2008, New York’s vacancy rate was around 5.8 % in Manhattan and 6% for Midtown. The headline rent for Grade A office space in midtown was $84.65 per sq ft. With additional space coming onto the market experts say the vacancy rate could rise to 8 or 9%.

Rental levels are expected to fall by 5% but could fall as much as 10% depending on how long and deep the reccession is.