Saturday, April 25, 2009

CRE: negative absorption through the first half of 2010

From the Portland Business Journal:

The recession has come calling on the Portland office market.
Leasing activity dropped, vacancy rates rose and the market returned more space than it took, according to early first quarter reports from both Grubb & Ellis Co. and Colliers International.
The commercial real estate brokerages use different measures to tally the market, so
their numbers vary, but both clearly show that demand for commercial office space is down because of the recession, now in its 16th month, and Oregon’s 12.1 percent unemployment rate.

Colliers International said there are 7.8 million square feet of office space available in the market, which translates to a 10.2 percent vacancy rate. That’s up from 8.8 percent just one quarter ago.
Lease transaction volume is down 64 percent in the same period, it said.
Colliers predicts more negative absorption through the first half of 2010. By the end of 2009, there will be at least one million square feet of negative absorption, which is the equivalent of U.S. Bancorp Tower, which has about 1.1 million square feet.