Office Vacancy Rate Improves While Industrial Vacancies Dip
Crains reported this month a positive improvement in suburban office vacancies which ended a string of 13 straight quarters of increases. The third quarter rate came in at 25.2% meaning one out of every 4 sq. ft. of office space is empty. This is great for prospective tenants who can just about write their own ticket in lease or lease renewal negotiations. Some experts predict this tenant advantage will continue thru 2011 before moving back the landlord’s way. Job growth or lack thereof is the stimulus that will boost the vacancy meter further in the right direction.
Crains also reported a slight surge or uptick in industrial vacancy rates in the third quarter after reporting a slight dip in the second quarter. 12% of all factory and warehouse space is vacant vs. 11.9% in the second quarter. This represents 3,000,000 sq. ft. of negative absorption. The vacancy rate is approximately half that of the office vacancy rate and gives you an idea of which property type has been hurt the most by this recession which is now going on 3 years.
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