Office Vacancies and Rents Are Still Slumping

Office vacancies rose 1 percent nationwide in the second quarter of the year to 15.45 percent, according to Colliers International, a real estate services firm.

The vacancy increase from 14.48 percent in the first quarter cuts across all kinds of property, Colliers said, although prime office space in downtown markets had the lowest increase in vacancy rates.

Rental rates also declined across the board. Since year-end 2008, downtown Class A weighted rents have fallen an average of 10.5 percent.

“Firms have little appetite for expansion and instead remain focused on reducing costs and watching their bottom lines," said Ross Moore, director of economic research for Colliers. "We expect further increases in office vacancy and falling rents for the balance of 2009."

Source: Colliers International (07/28/2009)