An article in today's Wall Street Journal titled, "Office Market Starting to Stabilize" had all my bosses rearing to report the investor plays on this newly energized sector.
Yes, this is the week that REIS, Inc., a well-respected commercial real estate information firm, reports all the quarterly numbers on all the commercial real estate sectors. It began with the office sector and the glowing proclamation, "The pace of deterioration has clearly slowed." My, that's a rave.
Office buildings still lost 1.9 million square feet of occupied space in Q3, pushing vacancies to 17.5 percent, which is a 17-year high. But the good news is that vacancies had been climbing at a much faster pace in 2009, and that's easing now.
Asking rents declined a miniscule 0.1 percent while effective rents were unchanged in Q3. "These figures represent a dramatic improvement relative to the quarterly declines recorded in 2009." Effective rates are now 12 percent below their 2008 high.