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Thursday, April 16, 2009

Report: Downtown Office Vacancy Rate Rises to 12.5%

by Calculated Risk on 4/16/2009 11:22:00 AM

Note: This report just covers downtown areas. The REIS report covers more area and shows the nationwide U.S. office vacancy rate at 15.2% in Q1.

From Bloomberg: U.S. Office Vacancies Rise to Three-Year High, Cushman Says

Office vacancies in U.S. downtowns increased to 12.5 percent in the first quarter, the highest in three years, as companies cut jobs and new buildings came onto the market, Cushman & Wakefield said.

The national [downtown] office vacancy rate climbed from 11.2 percent in the fourth quarter and 9.9 percent a year earlier ...

“This will be a very difficult year for commercial real estate and for office markets in particular,” said Maria Sicola, executive managing director and head of Americas Research for Cushman & Wakefield ...
You think?

On falling rents:
Downtown office landlords cut their asking rents by an average of 2.2 percent in the first quarter ... “We are just entering into what will be a very strong market for the tenant. We can see rents come down 10 or 15 percent or even 20 percent before this is over.” [Sicola said]
CRE is getting crushed.