The office availability rate throughout this ten-county regiondecreased slightly to 23.87% at the end of December, from 23.94% inthe third quarter, with tenants more inclined to start the initialrelocation/renewal process than in the past few quarters.

|

Meanwhile, FirstService Williams research shows that landlordsare continuing to list rents as negotiable as overall rentsdecreased to $23.51, down from $23.90 the previous quarter, andlease executions are still taking longer than historical norms.

|

The perception of a number of tenants is that overall officemarket conditions will continue to decline before improving, withvery few compelling reasons to relocate in what they still see as asoft market. In response, some landlords are continuing to offerrent concessions and, overall, are more inclined to executeshort-term leases, enabling them to ride out the tenant's marketwhile collecting rent rather than locking into long-term,discounted rental rates.

|

"We are cautiously optimistic that the market is showing theearly signs of recovery, but most tenants and landlords have notquite come around yet," says Matt Dolly, managing director ofresearch and marketing for FirstService Williams New Jersey. "Mosttenants are in a position to wait, while others may simply have tobecause their businesses are struggling or they are unable toobtain loans to finance a relocation or expansion. At the sametime, landlords are being more flexible in negotiations, but expectimprovements as 2010 progresses."

|

There is a general optimism that the economy is on a path torecovery. The overall national pace of job loss has slowed.According to the National Association for Business Economics,unemployment will start to drop in the first quarter of 2010, butthe real sign of positive momentum will come when employment startsto increase, as demand for office space will follow.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.