THE US office vacancy rate in the second quarter of the year rose to its highest level in nearly seven years as demand remained subdued.
According to real estate services firm Cushman & Wakefield, the national vacancy rate rose to 15,5% from 14,1% in the corresponding period a year ago. The last time the vacancy rate was this high was in the third quarter of 1996.
As the vacancy rate has risen, rents have fallen. The average national rental rate for Class A space declined marginally from the previous quarter to $29,49 a square foot. But rents are still down more than 5% from a year ago.
Cushman & Wakefield said this was the fifth consecutive quarter that rents in metropolitan CBDs declined. The last time rents were this low was 1999, when the average asking price was $29,13 a square foot.
Many metropolitan areas, including New York City, have suffered from a downturn in rents and occupancies as companies delayed decisions amid uncertainties over the economy.
The vacancy rate for Manhattan's commercial office space continued to rise in the second quarter as the city struggled with the worst fiscal crisis since the 1970s.
But there are signs of an uptick in leasing activity. For the one-month period ending June 30, the overall vacancy rate declined by a marginal 0,1% from the previous month.
Ken Krasnow, senior MD and head of the firm's New York office, said this was not statistically important but showed "a stabilisation of the market".
Jul 09 2003 08:20:23:000AM Lauren Foster Business Day 1st Edition
Publisher: Business Day
Source: Business Day
US office occupancy and rental rates drop.
Posted On Thursday, 10 July 2003 02:00 Published by eProperty News
THE US office vacancy rate in the second quarter of the year rose to its highest level in nearly seven years as demand remained subdued.
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