TOP COMMERCIAL REAL ESTATE NEWS STORIES
April 14, 2006 - April 20, 2006
Provided by Commercial Real Estate Direct
Dallas-Fort Worth Industrial Market Sees Gains
Leasing activity in the Dallas-Fort Worth industrial market is up in the first quarter. According to a report by Cushman & Wakefield of Texas, Inc., the market saw 7.6 million square feet of leasing. That's up from 6 million sf in the first quarter last year. Vacancy also fell to 11.8% in 2006 compared to 12.9% in 2005. About 5.6 million sf of office space is under construction, which is more than double the 2.2 million sf under construction this time last year. The Great Southwest Industrial District, the area's largest submarket, saw the largest increase, with 2.2 million sf of lease activity.
Office Demand Increases in Los Angeles
Office demand is increasing throughout Los Angeles County, especially in submarkets that normally lag in economic recovery. In one example, East San Gabriel Valley's vacancy rate dropped to 5% from 7.8% compared to the same time last year. Glendale's vacancy rate dropped slightly to 14.7% from 14.8%. Overall, Los Angeles County's vacancy rate in the first quarter was 11.2%, compared to 11% in the prior quarter and 14% a year ago, according to data from Grubb & Ellis Co.
Vacancies, Low Demand Hurt Detroit Office Market
The Detroit office market is awash with high vacancies, low demand and flat rental rates. Many landlords are willing to pay move-in costs, decorate the space and sometimes grant a year or more of free rent to good tenants signing a multiyear lease. The Comerica Tower at Detroit Center will lose two important tenants this year, The J. Walter Thompson advertising agency and the Ernst & Young accounting firm.
Austin Office Market Strong in Q1
The Austin, TX office market improved in the first quarter of 2006, according to Cushman & Wakefield. Lease rates were $21.20/sf, up from $18.24/sf in 2003. Suburban markets have grown in the last two years, according to the report, and demand has risen above that of the downtown markets, though this trend is now listing in the other direction as companies look to relocate into the city center. Vacancy dropped to 21.65% from the 22 to 23% averaged since 2004. The Northwest and Southwest areas continue to be the tightest markets, but vacancy rates are falling in most submarkets.
Residential Conversions Fuel Office Rent Increases
Office-to-residential conversions and mixed-use projects ate into available Hollywood office space in the first quarter, keeping rents and land values high. The tight market has driven asking rates for Clas-A office rentals to $2.89/sf, up from $2.54/sf in the previous quarter and up 43% from a year ago. First quarter vacancy rates at Hollywood office buildings were at 11.3% for the quarter, inching up from 11% in the previous quarter, but far below the nearly 20% vacancy rate three years ago. |
