430 likes | 545 Views
Merrick Bank. Prepared for: Brian D. Lee. Jordan Gateway Comps. Market Availables Report & Photo Fact Sheets. Jordan Gateway Marketing Flyer. Jordan Gateway Stacking Plans. Market A & B Comps. Market Summary & 2 nd Quarter Graphs. 2 nd 2009 Quarter Market Overview
E N D
Merrick Bank Prepared for: Brian D. Lee
2nd 2009 Quarter Market Overview • Direct vacancy increased to 13.6 percent at mid-year 2009, a 2.5 percent jump from the comparable period 12 months ago. The increase reflects a marked decline in demand and an overall weakening in market activity, both of which can be traced to job loss and the national economic downturn. • The year began with negative absorption (-62,374 sq. ft. Q1 2009) but several large office transactions completed during the second quarter pushed the mid-year absorption to 144,769 sq. ft. • Lease rates have continued to hold steady all market sectors. • Effective lease rates are lowering due to added concessions in the market. Landlords are providing at least one month of free rent per year of the lease term. We have seen some moving allowances and higher Tenant Improvement allowances as well. • Landlords are providing aggressive terms to accommodate and renew existing tenants. • Sublease vacancies continue to increase. Over 500,000 sq. ft. of sublease space is currently on the market representing 1.62 % of the total market. Discounted rents and turnkey operations are available providing competition to direct landlords. • Construction levels will continue to taper off into 2010 with speculative projects requiring significant preleasing. • 2009 Forecasting • Overall direct vacancy is expected to increase to over 15%. Including sublease overall vacancy is expected to top 17%. • Absorption levels are expected to remain lower than average. • Raising vacancy will put a downward pressure on lease rates. • Lowering of effective lease rates/added concessions will continue with current trend. • New construction levels will be below normal levels with 610,000 sq ft scheduled to be delivered in 2009 (of that amount 14% is leased) • No new projects are expected to begin construction in 2009 with the possible exception of Gateway VI downtown and View 72 in Midvale and even these projects will require significant preleasing. • Expect more companies looking to sublease this year with potentially large blocks of space with reduced lease rates and extras such as furniture included in the deal.