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Room At The Office?

Looks like it’s a renter’s market, especially in office real estate.

New data shows the office vacancy rate hit 17% nationwide, the highest level since 1994, according to the real estate research firm Reis Inc.

As a result, landlords have slashed rents by the largest amount since at least 1980.

That's especially true in New York, by far the largest office market, where rents fell 19.8% for the year, the largest 12-month decline since Reis began tracking them in 1981.

Is all the bad news baked in or is there more weakness to come?

What’s the trade?

I’d play it with Essex Property Trust, says Joe Terranova. It’s a REIT with a lot of exposure to California which is not in good shape. I’d play it short.


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Trader disclosure: On Jan 8th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (AMAT) Calls; Najarian Owns (TEVA); Najarian Owns (CELG); Najarian Owns (PCX) Calls; Najarian Owns (CLF), Is Short (CLF) Calls; Najarian Owns (FCX), Is Short (FCX) Calls; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (PFE) Stock; Najarian Owns (TCK), Is Short (TCK) Calls; Najarian Owns (XLF) Calls; Finerman Owns (AAPL); Finerman's Firm Owns (AXL), (AXL) Calls; Finerman's Firm And Finerman Own (GOOG); Finerman's Firm Owns (JPM) Calls; Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spread; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (IBB), (CSCO), (MSFT), (NDAQ); Finerman's Firm Is Short (TLT); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Is Short (IJR), (MDY), (SPY), (USO), (UNG); Grasso Owns (ABK), (AAPL), (ASTM), (BAC), (BGP), (C), (COST), (CSCO), (FAZ), (PFE), (PRST), (WMT), (V); Terranova Owns March British Pound Futures; Terranova Is Long Copper Backwardation: Long May 2010, Short July 2010; Terranova Is Short (CMA), (JCI), (ESS), (ICE), (SHLD), (CAL); Terranova Owns (XHB) Puts; Terranova Owns (QCOM), (MSFT), (EMC), (FTO), (XOM), (BAC)

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Additional Disclosures for Steve Grasso:
Stuart Frankel & Co. Inc. And Its Partners Own (AIZ)
Stuart Frankel & Co. Inc. And Its Partners Own (CUBA)
Stuart Frankel & Co. Inc. And Its Partners Own (GERN)
Stuart Frankel & Co. Inc. And Its Partners Own (GLG)
Stuart Frankel & Co. Inc. And Its Partners Own (HSPO)
Stuart Frankel & Co. Inc. And Its Partners Own (NWS.A)
Stuart Frankel & Co. Inc. And Its Partners Own (NXST)
Stuart Frankel & Co. Inc. And Its Partners Own (NYX)
Stuart Frankel & Co. Inc. And Its Partners Own (PDE)
Stuart Frankel & Co. Inc. And Its Partners Own (PRST)
Stuart Frankel & Co. Inc. And Its Partners Own (RDC)
Stuart Frankel & Co. Inc. And Its Partners Own (ROK)
Stuart Frankel & Co. Inc. And Its Partners Own (TLM)
Stuart Frankel & Co. Inc. And Its Partners Own (XRX)
Stuart Frankel & Co. Inc. And Its Partners Own (SDS)
Stuart Frankel & Co. Inc. And Its Partners Own (SBU)
Stuart Frankel & Co. Inc. And Its Partners Are Short (QQQQ)
Stuart Frankel & Co. Inc. And Its Partners Are Short (CL)

Additional Disclosures for Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)

For Tim Seymour
Seymour Owns (EEM)
Seygem Asset Management Owns (EEM) Puts

For Brian Stutland
Stutland Owns (AA) Calls
Stutland Owns (GS) Bonds
Stutland Owns (WFC) Bonds
Stutland Owns (GS) Calls, Is Short (GS) Put Spread
Stutland Is Short (BAC) Volatility
Stutland Is Long (MU) Through Options



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