"Near non-existent demand, continued job losses and new space being delivered to the market indicate that the outlook for office space is likely to remain anemic for the next few quarters," says Ross Moore, vice president and director of research for Colliers International.
The national office market experienced its eighth consecutive quarter of negative absorption at year end 2002, "indicating that hopes for a recovery of the commercial real estate markets in the first half of 2003 may have been too optimistic," Moore says.
In Central Florida, Bobby Palta, research analyst in Collier's Orlando office, shows a negative absorption of 149,335 sf in all of the 7.9 million sf in Downtown for the first three quarters of 2002. it also reveals a negative absorption of 95,841 sf in the 3.2 million sf of class A product.
In the suburbs, there was a positive absorption of 187,052 sf for the same period in all classes. This is out of a total inventory of 40 million sf. In addition, the report reveals a positive absorption of 297,144 sf in the 12.8-million sf class A inventory.
Average quoted rent is $23.57 per sf for class A Downtown and $20.27 per sf in the suburbs. In the suburbs, developers have started a total 832,592 sf of various projects, although there is no new construction Downtown. Class A product alone totals 471,487 sf.
"As expected with weak demand, rents once again trended downward, with CBD rents (nationally) falling 3.4% during the quarter and suburban rents down 1.5%," Moore says. Average CBD rents were $33.30 per sf at year-end 2002, with average suburban rents at $23.90 per sf. For all of 2002, rents (nationally) were down by 12.5% in the CBD and 9.5% in suburban markets.
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