X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

NEW YORK CITY-As 2001 approaches and the equity markets show signs of a soft landing, a hard landing or perhaps an outright recession, the market for office space remains positive. Below are snapshots of what can be expected in the office sector for 2001 in several major markets.

In New York City, the booming job market, (7,800 jobs were added in the private sector just in November) is one of the drivers of the office market. During 2000, available space fell by about half to 3.5% in Midtown, to 4.3% Downtown and slightly (to 5.3%) in Midtown. Average asking rents rose to an all-time high in Downtown, dipped slightly in Midtown, and came near an all-time high in Midtown after a small slump in October.

Development of new office buildings continues to be strong. A visitor to Times Square might assume there was no more room for yet another skyscraper, but they’d be mistaken. Boston Properties has announced that it will put up Times Square Tower on 42nd Street between Sixth Avenue and Broadway. The company is also erecting 5 Times Square, which it has leased entirely to Ernst & Young.

For the full story, click on:Office Market Flourishes in Line with City’s Fast-Paced Job Growth

New companies entering the market and the demand for office space by current tenants in Orlando saw net absorption in the third quarter of more than 623,000 sf, and a decline in the vacancy rate from 10.2% to 9.9% in the second quarter. Downtown, where about one million sf of class A space came to market, saw over 252,000 sf of net absorption in a single quarter, the largest in the last ten years.

In metropolitan Charlotte, Bank of America is putting up a 120,000-sf property, Childress Klein Properties is erecting a building with the same amount of space at LakePoint Corporate Center and High Associates is at work on one of two 100,000-sf buildings.

And in Atlanta, the metropolitan market absorbed 5.93 million sf during the first three quarters, a record, and saw average full-service rents rise to $21.34 per sf from $21.01 at mid-year.

For the full story, click on:Demand for Office Space Remains Strong with No Signs of Local Slowdown

Absorption of office space is predicted to reach two million sf by the end of the year in Austin, despite the collapse of a half dozen dot-coms. The vast majority of the space they returned to market has been backfilled. And, two years ago the Dallas-Ft. Worth market saw 18 million sf of spacecome to market, only half of which was leased. This year, on the other hand, 11.2 million sf was delivered and 6.5 million sf was absorbed by the end of the third quarter. The class A vacancy rate, however, is at 12%, the highest in the region. This is attributed to the demand for newer, high-tech buildings located closer to where workers live.

In Houston, construction is down, with less than two million sf slated to come to market this year compared to three million sf in 1999. Rents in the CBD range from $24 per sf to $26 per sf, and the occupancy rate for class A properties in at 98%.

For the full story, click on:Southwest’s Slowing Economy Offers Vital Breathing Space

Net absorption of office space amounted to 1.8 million sf in Portland, a record, and rental rates rose 10% during 2000. Chipmakers and the companies that supply them, along with growth in the software and computer service sectors were largely responsible for this success, and they are expected to do the same for this market over the coming 12 months. During the next year, one million sf will come on line when the Blitz-Weinhard Brewery redevelopment is completed. Also in the pipeline are 150,000 sf of class A space being developed by CE John and 200,000 sf in the Lloyd District that is being brought to market by Transworld Properties.

The market west of the city, which suffered a 40% vacancy rate in 1999, has improved dramatically; it’s down just 7% now. This has encouraged construction of build-to-suit and speculative projects including Opus’ 120,000-sf Cornell West venture, two office buildings being developed at Woodside Corporate Park by Insignia and Carr America’s Sunset Corporate Park project.

For the full story, click on:Portland Metropolitan Office Market Looks Solid Heading Into 2001

On the west side of LA, dot-coms have returned more than half a million sf of space to market, which has more than doubled the record low vacancy rate of 3.4% reached earlier this year. But brokers aren’t getting nervous because there are non-tech organizations such as financial services companies and law firms that are taking their place.

Downtown is another matter. Some predict that new tenants will be attracted to the area by rents that are 10% to 40% below other submarkets due to a vacancy rate of 24%. Others are not so optimistic, noting that if the surrounding areas soften there would be little incentive to make the move if the savings would only amount to 10% or 20%.

Most agree, however, that the South Bay market will remain strong through next year thanks to higher rents on the west side to the north. In the San Fernando Valley, rents are forecast to go up about just 5%, approximately half the increase of the last few years.

For the full story, click on:SoCal Office Market: Slowdown, Not Meltdown, in 2001

Alex Finkelstein, Connie Gore, Brian Miller, David Myers and Amy Vaughn contributed to this story.

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

Once you are an ALM digital member, you’ll receive:

  • 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
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.