Downtown San Antonio has recently seen one of the largest letting deals for many years with a 50,000 square feet deal secured at the Bank of America Plaza. The new tenants are a federal agency. The landmark building is spread over 28 floors, equating to 533,000 sq ft. It has remained vacant since AT&T moved out nine years ago. This information was disclosed by Larry Mendez, senior VP at Transwestern, who represented the landlord. There will now be 200 jobs created at the building.
The deal gives a real boost to the downtown office market in San Antonio. Before the deal was secured the vacancy rate was 20.6% and the average rental rate was $18.95. More deals like this will be needed to help revive the market further.
20.6% is higher than the national average vacancy rate which is closer to 15%. San Antonio has been hit hard by the recession with large companies shedding staff and contracting in size. Many experts predict that the office market will not recover until 2010 at the earliest.
Executive suites, also known as business centers or serviced offices, are becoming more and more popular across the US. Operators like Regus are providing businesses who may be struggling with occupancy costs and long lease agreements with a simple, money saving workspace solution. This flexible office space is suitable not only for established corporations, but also the smaller companies that need an office where they will not be wasting space and have a fixed outlay of capital each month. Most business centers will get new tenants from either brokers as well as real estate companies. Larger requirements are more likely to come form traditional office agents, but more often their clients are advised to sign a traditional lease.
(more…)
The office space vacancy rate in Columbus has remained high because companies in the area have been struggling, according to local commercial real estate experts.
The vacancy rate for the city was in Q2 14.1 percent, up from 13.55 percent in Q1 2009. This equates to an extra 157,000 sq ft of office space that has come back on the market. Class A office space appears to be fairing better than class B space, as only 25% of the vacant space that came on the market was class A space.
The rate is directly impacted by companies that close offices and shed staff. The amount of available office space in Columbus is set to increase as companies withdraw from expansion and relocation. Whatever the problems in Columbus, they are not as bad as the national picture where there is a vacancy rate of 15.5 percent in Q2.
The national office space market is still in a serious condition with the vacancy rate rising in Q2 to 15.45 percent from 14.48 percent at the close of Q1. The rises have been taking place in both prime downtown and out of town suburban areas across the US. In fact out of town, older and less sought after locations are seeing higher vacancy rates than premium downtown locations. Out of town offices are often cheaper and so you would imagine would fair better than downtown office space, given the amount of major US corporations who have been shedding jobs.
(more…)
Office space in the US, that is conventional offices (not executive suites) are generally classed as either class A, B or C.
Class A office space is often the most expensive workspace as is often referred to as the “best available space”. They will be the newest, corporate style buildings with the very latest facilities, technologies and amenities. In fact many business centres are comparable to the standard of workspace you get in class A buildings.
Class B office space. Many class B buildings used to once be known as class A space. Class B and class A office space appeal to businesses who require high quality office space in prestigious locations.
Class C office space is often budget style office space, with a minimal and functional design. The space is most often used by companies who need to keep property expenditure as low as possible. They can be new builds, but mostly they will be older buildings that may have no elevators or air conditioning.
(more…)
Demand for offices in the San Gabriel Valley increased in Q2 of this year, as companies look for smaller offices. Rents also fell as the area becomes a tenants’ market. In Los Angeles County, vacancies for office space are up 41 percent, with rents dropping 5%. One problem is that companies who had leases on large spaces are not renewing and looking for smaller office space.
Some areas have been hit worse than others, for example areas where there were financial companies, the situation is a lot worse. Last year, for instance, the Pasadena area had an 8.8% vacancy rate. The figure this year is 10.4%, as rents fall from $3.96 per square foot to $2.74 psf. Office rental prices in the Valley also fell 18%, from $2.65 psf to $2.17 in 2009. It seems there is a lot of demand for office space below the 5,000 sq ft mark.
When the market will recover is very hard to say. However many experts say that the course of the US economy will have the greatest impact on this.
The US economy lost 670,000 jobs per month from November 2008 to March 2009. The rate slowed slightly from April this year to June when there was 436,000 jobs losses per month. Although the rate of job losses is slowing, it will not be enough to rekindle the office market, so say commercial property experts.
The office space market in the US had a net negative absorption rate of 25 million square feet in Q1 of this year, with 20 million sq ft of space recorded in Q2. This is the sixth quarter in a row where than has been net negative absorption. This trend will continue with experts predicting an average rate of 11 million square feet towards the end of the year. Realistically there is no chance of a recovery or even the signs of a recovery until 2010.
The office market is often seen a key barometer of the wider economy, and with no growth forecast until next year, it will be a turbulent time for landlords, agents and real estate companies.
Commercial property is one the biggest polluters in terms of energy use. Lighting, heating, air conditioning, and electricity use all contribute to the effects of global warming. However there are many ways of reducing the impact your business has on global warming. One of these ways is to use eco-friendly supplies.
-Use cradle-to-cradle furniture, which is biodegradable
-Use recycled paper
-Use recycled stationery
-Use recycled toilet paper.
-Use flourescent light bulbs.
-Unplug equipment at night such as monitors.
There you go, some easy ways to be green in the office.
Atlanta taxpayers who were recently hit by a large tax increase are now being asked to pay for city office space in a prime location.
The City of Atlanta Parks and Recreation Department is to move offices to the Peachtree Center building. The proposed new location in downtown Atlanta, which is being chosen as City Hall is to close, will cost around $500,000. The move has come as a shock to some given the recent budget cuts in the City. Critics point to the fact that the City owns other buildings in the area, as well as in the south side of the City that could be used as an alternative.
One local representative defended the move saying that there”was no other suitable alternative for the department.” Those who pay taxes in the area may not see it in the same light, given the problems with unemployment in the area.
The US economy is in intensive care and has been so for a number of months now. When it will recover is unclear, but experts are saying that 2010 could be the year that we start to see progress. Closely linked to the performance of the US economy is the performance of the US office space market. Regular readers of this blog will know that the same problems are besetting many cities in the US. These are high vacancy rates, weak demand and static or falling rents.
(more…)
