Your Commercial Real Estate Source in the San Francisco Bay Area
REIS recently reported on some of their findings for the first quarter of 2011. Not a huge surprise given the fact that we’ve reported on many of these happenings recently, including their analysis on office absorption. Here are some snapshots on their early findings: (By the way, look out for our Kidder Mathews Q1 report to come out soon!)
Office vacancies decline for the first time in three years. National vacancy rates for office properties fell from 17.6% at the end of 2010 to 17.5% in the first quarter of 2011. This period also marks the second consecutive quarterly increase in occupied space following eleven consecutive quarters of decreases.
Still, uncertainty hangs over the global economy. Although we expect the economy and labor markets to continue to improve, we expect this to be a long and inconsistent ride given the depths of the past recession, ongoing pervasive debt problems, geopolitical risk, and increasing food and commodity inflation.
We’re still searching for the bottom in the retail sector. The vacancy rate for neighborhood and community centers stayed flat at 10.9% during the first quarter. This marks the third consecutive quarter that the rate was unchanged. However, the main reason vacancies have trended flat is because inventory growth has slowed to a crawl. Only 83,000 square feet of new neighborhood and community center space came online this period. In other words, flat vacancies represent the absence of demand more than a sector heading for recovery.