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Downturn Preys on Office Real Estate Market


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Office Real Estate

 

Here’s a story that should be of interest to any rental property investor.  The office real estate market has fallen prey to the ongoing economic downturn. While it is common to spot ghost town-like abandoned office construction projects around the popular commercial districts, real estate dealers have also been impacted by businesses resorting to shedding existing office space at an alarming rate in an effort to cut costs.


At the peak of the crisis, US businesses jettisoned an estimated 139.9 million square feet of office space, and commercial real estate has never quite recovered from that state of affairs. And while the national office vacancy rate ticked down a few points in Q1 of 2012, the office real estate market continues to look listless. The 1Q 2012 vacancy rate stood at 17.2%, an encouraging step down from 17.3% in the 4Q 2011, but still worryingly high from the 12.5% seen in 2007. Many market analysts predict continued sluggishness as long as the unemployment rate continues to remain high.


The good news is that the office real estate market is highly location dependent, and some regions have escaped the ongoing lethargy.

In fact, certain markets like San Francisco have seen an almost overnight revival in the office space market thanks to the booming business of technology and energy companies.

Click to check out more statistics, data, and analysis on the current state of the office real estate market.



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