Jones Lang LaSalle predicts that Dallas will have the highest downtown office vacancy rate at 27% and will see a moderate decline in rent growth between now and 2008. Denver, by contrast, is expected to see inflationary increases in rates. The report also includes projections for Chicago, Houston, Los Angeles, Atlanta and Northern New Jersey for suburban markets.
In the suburban markets, Jones Lang LaSalle predicts a 17% vacancy rate for Denver. The only market it projects to have a higher suburban office vacancy rate is Dallas, at 19.7%. Jones Lang LaSalle is predicting a flat to small increase in rent rates for the Denver suburban market, while it projects a moderate decline for Dallas. For suburban markets, it is projecting that Los Angeles will have the lowest vacancy rate in three years at 11.1%.
Currently, downtown Denver has a 12.8% direct vacancy rate, while the suburban office market has a 17.6% vacancy rate, according to Jones Lang LaSalle. Downtown showed positive net absorption of 300,000 sf in the second quarter, while the suburban market shows negative absorption of 200,000 sf, according to the report.
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