ATLANTA, GA– The office market made a strong showing in the second quarter, renewing hopes for a solid recovery. The “Commercial Real Estate Show” this week provided an update on the U.S. office market with the latest statistics from CoStar andinsights from our panel of industry experts. We also got an inside look at how the federal government is trying to reduce its real estate portfolio.
After a rough start to 2011, the office market rebounded in the second quarter.
“The second quarter had a strong uptick,” said Chris Macke (top right photo), senior real estate strategist at CoStar Group Inc. “Net absorption increased about 40 percent from the first quarter to the second quarter.”
The vacancy level nationally held steady at 12.6 percent, according to CoStar. There continues to be strong interest from investors in office properties and a rise in sales. Most signs — except for declining rental rates — point to a healthy recovery.
But there’s one major caveat: Supply must continue to be restrained.
Both office and retail construction are at 40-year lows, which is enabling the market to recover without tremendous demand, Macke explained. “It’s really critical that that dynamic stays in place,” he said.
It’s even more important in some markets than others. Cities like Washington, D.C. and San Francisco are thriving, while Phoenix and LasVegas are still trying to regain ground.
“The office fundamentals remain choppy from market to market,” said Casey Keitchen (middle left photo), vice president of the National Office Group of Bull Realty, Inc. “In Atlanta, the vacancy rate has actually increased over the previous quarter so we are seeing some more challenging times ahead.”
In markets that are still in recovery mode, landlords work overtime to attract tenants and keep them happy with perks like generous tenant improvement packages and one month’s free rent per year.
The show aired Saturday on Biz 1190 in Atlanta and is available for download here. Other guests included Robert Peck (lower right photo), Commissioner of Public Buildings at the U.S. General Services Administration and Court Thomas, partner at Atlanta Property Group.
The next “Commercial Real Estate Show” will air July 16 and offers an inside look at the national multi-family sector. Tune in to get the latest details on this very important market, including rental rates and occupancy levels.
Contact:
Christin Clay
Wilbert News Strategies
1720 Peachtree St, Suite 1040
Atlanta, GA 30309
p 404-965-5025 | m 404-405-2354
or Tony Wilbert,404.965.5022
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