Corporate Tenants: Time To Be In The Market?
May 03, 2011
If you are a tenant with two years or less remaining on your lease, it’s time to assess your options. Several key measures indicate that the trend is finally starting to turn. The national office vacancy rate fell for the first time in three years signaling the market is beginning to recover as the economy improves. The rate dipped .2% vs. last year’s high of 17.4% vacancy rate.
In key markets of New York and Washington DC, asking rental rates actually increased for the second straight quarter. Currently, Washington DC has the lowest office vacancy rate at 9.1%, with New York at 10.5%. The demand for office space is starting to spread beyond New York and Washington DC as employers have been adding jobs for the last five months. Rent increases in 2012 are expected to occur in Boston, Pittsburgh, Dallas, Austin, Salt Lake City, and San Francisco. On the other side, Phoenix and Detroit have the highest vacancy at 26.9% and a rent increase in these markets is a dream.
New construction is still on the sideline but as the jobs market begins to rebound, 2012 and 2013 are setting up to be a surprise for tenants in several markets.
Again, if your lease is expiring in the next few years, you should be in dialogue with the market now. Please call us for thought leadership and to secure aggressive economics in your next lease.
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