Barbara Denham, Economist at Reis, appears on The Commercial Real Estate Show to review office market performance and variables that may be affecting it, including differences in suburban versus urban office space performance. Highlights include:
- Vacancy rate was flat at 16.1% for Q3, also unchanged for year
- Rent grow 0.3% in Q3, 1.4% year over year
- flat vac rate and rent growth
- odd given how deep we are in this cycle
- Similar vacancy trends in class A and B office space
- In height of 2003 to 2007 expansion vacancy rates dropped to 12.3% as opposed to stalling today at 16% or so
- Vacancy rate unchanged for 7 quarters in a row
- Seeing big gap between good and bad markets
- Gap in performance anticipated to widen
- Expect rent growth of 2 to 2.5% in next year
- Suburban markets have rebounded, now doing about as well as central business district markets