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Office Market Overview

Office Market Overview. presented by John J. Leary, MAI, CRE, FRICS Leary Counseling and Valuation, Inc. New Haven, CT UConn Center for Real Estate 2007 Connecticut Commercial RE Conference November 8, 2007 Farmington, CT. Acknowledgments. Tim Mitchell CBRE/New England

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Office Market Overview

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  1. Office Market Overview presented by John J. Leary, MAI, CRE, FRICS Leary Counseling and Valuation, Inc. New Haven, CT UConn Center for Real Estate 2007 Connecticut Commercial RE Conference November 8, 2007 Farmington, CT

  2. Acknowledgments Tim Mitchell CBRE/New England Nick Morizio, SIOR, CRE Colliers/Dow & Condon cushwake.com Cushman & Wakefield Leary Counseling and Valuation, Inc.

  3. Hartford County Office: 3Q 2007 Source: CBRE/New England Total SF%AvailAvg Rent City 10,509,840 20.25% $19.96 Suburbs 15,122,376 16.65% $18.47 Total 25,632,216 18.12% $19.17 Leary Counseling and Valuation, Inc.

  4. Hartford County Office: 3Q 2007 (continued) Source: Colliers/Dow & Condon Total SF%AvailAvg Rent City 10,049,993 15.60% $18.73 Suburbs 14,272,759 16.77% $18.06 Total 24,322,752 16.29% $18.34 Leary Counseling and Valuation, Inc.

  5. Hartford County Office: 3Q 2007 (continued) Source: Cushman & Wakefield Overall Avg Rent Total SFVacancy(Class A) City 10,409,730 21.1% $22.34 Suburbs 15,217,898 14.4% $19.28 Total 25,627,628 17.1% $21.50 Leary Counseling and Valuation, Inc.

  6. New Haven County Office: 3Q 2007 Source: CBRE/New England Total SF%AvailAvg Rent City 5,648,241 15.49% $21.00 Suburbs 6,367,449 18.30% $17.91 Total 12,015,690 16.98% $19.36 Leary Counseling and Valuation, Inc.

  7. City of New Haven Office: 3Q 2007 Source: Colliers/Dow & Condon Total SF%Avail CBD 2,772,990 9.0% Non-CBD 2,236,382 23.1% City 5,009,372 15.3% Leary Counseling and Valuation, Inc.

  8. Fairfield County Office: 3Q 2007 Source: Cushman & Wakefield Overall Avg Rent Total SFVacancy(Class A) Stamford 14,551,388 15.5% $39.75 All Other 25,029,793 11.6% $32.69 Total 39,581,181 13.0% $35.18 Leary Counseling and Valuation, Inc.

  9. Office Market: The Big Picture Capitalization Rate Compression Source: Real Estate Research Corporation Going-In Cap Rates: First Tier RE-East CBD Suburban 2Q 2007 5.0-8.5%: 6.7% 6.0-8.5%: 7.1% 2Q 2006 6.0-9.0%: 7.2% 6.5-9.0%: 7.5% Leary Counseling and Valuation, Inc.

  10. Office Market: The Big Picture(continued) The EOP Effect • Blackstone buys Equity Office Properties for $40,000,000,000+ • Blackstone spins off EOP buildings to third party buyers (individually and in packages) • Unprecedented shift in transaction volume toward office space in 2007 Leary Counseling and Valuation, Inc.

  11. The EOP Effect in Stamford Blackstone to RFR Holdings: 01-Aug-2007 SF GBAPrice/SF 300 Atlantic Street 267,935 $563.57 177 Broad Street 178,935 $441.50 201 Broad Street 332,991 $450.46 107 Elm Street 249,301 $457.28 263-281 Tresser Blvd 487,997 $461.07 301 Tresser Boulevard 254,902 $513.92 Total Transaction: $850,000,000 $479.67 Avg Leary Counseling and Valuation, Inc.

  12. Other Stamford Transactions SF GBADatePrice/SF 2187 Atlantic Street 105,000 Sep-07 $504.76 One Atlantic Street 81,491 Sep-07 $263.83 Stamford Landing and 600 Summer Street 302,500 Jul-07 $286.94 333 Ludlow Street 393,670 Jun-07 $344.83 1010 Washington Blvd 143,300 Jun-07 $265.18 (Prior Sale in 2005: $149.34) Total Transaction Price (2007 Sales): $335,050,000 Weighted Average Price Per SF: $326.57 Leary Counseling and Valuation, Inc.

  13. Office Market: Caveats and Question Marks • Does Sam Zell (CEO of former EOP) know something we don’t know? • Will shadow space haunt us during the next 10-15 years? • Is the 10% vacancy paradigm still valid in the 21st Century? Leary Counseling and Valuation, Inc.

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