Over the next two years, the firm expects that the vacancy rate will move up between 2% and 3% due to the delivery of more than two million sf of office space. Despite this influx, however, net effective rents are not projected to level off in the near future.
Devencore forecasts that many tenants will make the move to class B space as the rents of class A offices rise, a trend that can seen even now in the vacancy rates for this sector. They have plunged from 20.4% in December 1998 to 11.5% today and are expected to fall further going forward.
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