 |
| Michael Bull |
ATLANTA, GA– Its recovery may not be proceeding at a
lightning-quick pace, but the U.S. office real estate market continued to show
signs of noticeable improvement in the first quarter.
That was one of the
observations of a panel of experts on the most recent episode of the
“Commercial Real Estate Show” radio program, hosted by Michael Bull of
Bull Realty. The episode provided an enlightening look at the performance of
the U.S. office sector in the first quarter.
Topics included vacancy rates, investment sales, the
healthiest markets and tenant concessions.
 |
| Ryan Severino |
The national vacancy
rate for the office sector fell 10 basis points in the first quarter, to 17.0
percent, from its mark at the end of 2012, said Ryan Severino, senior
economist for Reis. Both asking and effective rents grew by about .7 percent in
the first three months of the year, he added.
“We’re more the
tortoise than the hare here,” Severino said. “We’re kind of slow but steady.”
The rest of 2013
will produce much of the same, Severino predicted. “I do expect to see
continued improvement in the sector, but I don’t really expect to see any
acceleration in that rate of improvement.”
 |
| Glen Marker |
Although the nation
is producing new jobs each month, too few are office-using positions, and that
dynamic is preventing the sector’s recovery from attaining a brisker pace,
according to Severino.
Over the next few
years, metro areas characterized by “a high concentration of well-educated
people and a fairly low cost of doing business should” produce a healthy pace
of new jobs, said Glen Marker, a senior market advisor with PPR, a
division of CoStar. He cited Nashville, Tenn., and Denver as two such markets.
Tenants want smaller offices these days, and they often want
the spaces they’re considering to be move-in ready, said Andrew Segal,
the founder of Boxer Property, which owns office space across the country.
 |
| Andrew Segal |
“We’re definitely
seeing more open [floorplans],” Segal said. “There’s also a trend of adopting
some of the looks from California. People are less interested in ceiling tiles
and carpet and more interested in exposed ductwork and concrete floors.”
As for investment
opportunities, the amount of distressed properties available for relatively low
prices is beginning to decline, said David Wheeler, executive vice
president of acquisitions for Hartman Income REIT.
 |
| David Wheeler |
“We did see a fair
amount of distressed sales over the last two to three years, but that is
dwindling, slowly but surely,” Wheeler said. “We do expect that to continue to
play out with the level of CMBS loans coming up for expiration over the next
couple of years … It’s going to dwindle, but it will still be in the market for
another couple of years.”
The entire episode
on the U.S. office market is available for download at
www.CREshow.com.
The next “Commercial Real Estate Show” will be available May 2 and will examine
the U.S. retail market.
For a complete copy
of the company’s news release, please contact:
Stephen Ursery
The Wilbert Group
Office: (404) 965-5026
Cell: (404) 405-2354
