Office Vacancies Creep Up, Apartments Stabilize
There’s more empty space in U.S. office buildings, shopping malls and industrial parks, says CBRE Econometric Advisors. The good news the rate of increase is slowing. “Like with job losses, the worst period of vacancy increases is behind us,” says Jon Southard, Director of Forecasting at CBRE. “Still, this is of little comfort when ‘less bad’ only adds to record high vacancy rates in many markets and property types.” The office vacancy rate increased .6% to 16.1%, at the end of the third quarter. This was the eighth consecutive quarter of rising vacancy rates.
The suburban vacancy increase was slightly higher, than the increase for downtown areas. Downtown areas’ relative outperformance in this recession continued, CBRE says, with a cumulative increase of 2.6% through the third quarter. By contrast, suburban vacancy rates have risen by a total of 4.3%, thanks largely to the subprime crisis hitting some suburban markets as early as mid-2007.
The trouble getting tenants is a national problem with 46 out of the 57 markets recording rising vacancy rates. Fort Worth, Austin and Houston stood out as relatively good performers. The natural resources, high-tech firms, and banks’ conservative lending practices in Texas helped that local economy so far in this recession, the report said.
Vacancy in industrial space stood at 13.5%. Retail availability stood at 12.3%. The economic crisis’ negative effects on neighborhood and community centers is dwindling, CBRE said.
The apartment vacancy rate held steady at 7.4%