Monday, February 04, 2008

Year-End Office Market Statistics

The year-end office market statistics have been released by Colliers Turley Martin Tucker:

Class A
Total 4Q Vacancy Rate: 16.9%
Prior Quarter: 17.4%
4Q Net Absorption: 33,000 sf
Total 2007 Net Absorption: (91,000 sf)
Average Full Service Rent: $19.09 psf

Class B
Total 4Q Vacancy Rate: 22.0%
Prior Quarter: 22.4%
4Q Net Absorption: 21,000 sf
Total 2007 Net Absorption: 69,000 sf
Average Full Service Rent: $14.41 psf

As a point of comparison, here are the year-end figures from 2006:

Class A
Total 4Q Vacancy Rate: 14.7%
Total 2007 Net Absorption: 203,000 sf
Average Full Service Rent: $19.71 psf

Class B
Total 4Q Vacancy Rate: 26.0%
Total 2007 Net Absorption: (36,000 sf)
Average Full Service Rent: $13.85 psf

Right now, there is over 1 million sf (1,129,296 sf) of vacant Class A space in the CBD. It's important to note that half of the vacant space (563,000 sf) is available in three buildings: One City Centre, which is under redevelopment (290,000 sf), the Sherwood Medical Building at 1915 Olive (143,000 sf) and the General American Building (130,000 sf). There's also nearly 100,000 sf currently available in the Bank of America Tower, consisting of numerous smaller vacancies spread out over several floors.

500 N. Broadway has the largest contiguous block of Class B space, with 82,000 sf. Lewis Rice's decision to stay there or move will have a major impact on the Class B market this year. If they stay (or stay and expand), the Class B market will remain steady or improve slightly, and if they move, it will likely be to Class A space, leaving a large block of vacant Class B space available. The Class B market will be buoyed by the recent whole-building lease of 1881 Pine.

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