NEW YORK CITY-Today should begin an informative period as many REIT will begin revealing their second quarter financial results. Reports should be positive on all fronts as apartment space and office space both have a high percentage of occupancy.

Year-to-date returns for both apartment and office space grew by more than 23%, according to published data from the National Association of Real Estate Investment Trusts.

The US office market has seen vacancy rates tumble and rents soar. As reported previously in a conversation with Cushman & Wakefield chief operating officer for the firm’s New York Metro Region Joe Harbert, we may be on the cusp of astronomical rents.

“A shortage of high-quality available space in Midtown and a lack of new product on the horizon have given landlords the upper hand,” said Harbert, Cushman & Wakefield’s chief operating officer for the firm’s New York Metro Region.

The US office vacancy rate fell to 13.07% in the second quarter, from the prior quarter’s 13.23% and down from a high of 16.4% at year-end 2003, according to the association.

Midtown saw average asking rents rise 12.1% to $66.85 per sf. Even the slower Downtown market saw rents rise 10.7% to $42.81. Downtown asking rents during the quarter rose 4.1%, to an average $37.60 per sf, while suburban rents rose 2.4% to $24.97 per sf. But in key cities where many REITs are concentrated, rents have soared much more. Year-to-date asking rents in Los Angeles are up 22.9%, San Francisco up 25.1%, and San Diego up 10%.

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