East Coast Cities Top Lowest Vacancy Rates

NEW YORK CITY-Charlotte, NC had the nation's lowest downtown office vacancy rate, followed by Midtown Manhattan and Boston, according to CB Richard Ellis Group Inc.'s US National Office Vacancy Index for the third quarter of 2007. With a 2.6% rate, Charlotte had the lowest downtown office vacancy in the country for the third straight quarter. Midtown Manhattan followed with a 4.9% rate, and Boston was third with a 6.1% vacancy rate. Downtown Manhattan had a 6.3% rate and the top five was rounded out by Las Vegas, which posted a 7.4% vacancy rate.

The lowest suburban office market vacancy rate was Honolulu at 6.8%. Miami was next at 7%. Orlando was third at 8.2%, followed by Los Angeles' 8.4% and Ft. Lauderdale's 8.8% vacancy rates.

On a national basis, overall office vacancy remained unchanged at 12.6%, consistent with the end of the second quarter and below the 13.2% posted a year ago. Downtown office vacancy was 10.3%, down 30 basis points from the previous quarter and is the lowest since the second quarter of 2001. Suburban office vacancy was 13.9%, a slight increase of 20 basis points from the second quarter.

The downtown markets with the largest quarterly vacancy rate decrease during the quarter were Kansas City and Wilmington, DE, which both fell 2 points, with Kansas City posting a vacancy rate of 16.8% and Wilmington 15.4%. Tampa, FL dropped 1.9 points to 14.5%, while Cincinnati decreased 1.5 points to 15.1%. In the suburban markets, San Francisco decreased by 2.8 points to 9.1%. Atlanta dropped 1.5 points to 17.5% and Columbus, OH and Wilmington both fell 1.3 points, with Columbus dipping to 18.0% and Wilmington declining to 15.8%.

At 27.5% Detroit's vacancy rate remained the highest among downtown markets in the country for the third straight quarter. Dallas/Ft. Worth had the greatest quarterly increase in vacancy rates, rising 2.4 points to 23.5%. The market with the highest suburban vacancy rate was Detroit at 24.5%, while Las Vegas posted the sharpest quarterly increase among suburban markets, rising 2.7 points to 12.7%.

The CB Richard Ellis Office Vacancy Index measures the vacancies, construction completions and net absorption in downtown and suburban areas of the US and was prepared by Ward Caswell, head of US research. The index is based on a quarterly survey of competitive office buildings. The vacancy rate is computed as a percentage, dividing vacant space for lease by the total square footage of competitive non-medical, multi-tenant office space in each market.