Grubb & Ellis report predicts struggle for telecom markets
The nation's telecom markets remain in the dumps. And ongoing bankruptcies, corporate layoffs and reorganizations aren't helping them recover from the “dot-com crash.”
Northbrook, Ill.-based Grubb & Ellis provided that assessment in its 2001 telecom market report, released in September. In the report, published quarterly, the company defines telecom market space as buildings over 20,000 sq. ft. that are more than 75% dedicated to telecom use, such as carrier hotels andcyber centers.
According to the report, telecom vacancy levels around the nation dropped to 38.9% in the second quarter from 44.6% in the first quarter, but the report emphasizes that the increase in occupancies doesn't mean the sector is poised for a major rebound.
“The decline in the telecom vacancy rate during the second quarter is encouraging, but it does not reflect an improvement in the underlying supply-demand fundamentals,” the report states. “Rather, vacancies were pushed lower when tenants who had signed leases in prior quarters moved into their spaces after improvements were completed.”
The report cites deliveries of newwith significant amounts of pre-leasing as another reason for the decline, but excess inventory still waits to be absorbed. At mid-year 2001, 5.4 million sq. ft. of telecom space was under construction, with 18.5% of it pre-leased.
Telecom sublease space soared by 89% during the second quarter of this year to a total of 749,000 sq. ft. as companies such as NorthPoint, PSINet, Teligent and Winstar declared bankruptcy and other companies in the process of downsizing placed space on the market to boost cash flow.
On the brighter side, the report points out that blue-chip telecom companies completed significant leases in key markets during the second quarter, including Sprint in Atlanta,and Los Angeles. In addition, the Network Access Point (NAP) opened in Miami and is considered to be a success. NAP houses 32 telecom, Internet and Web-hosting service providers, including AOL Time Warner.
The report predicts that although conditions in the telecom market will not change dramatically over the next 12 to 18 months, well-capitalized telecoms will continue to grow and take more space.
Energy, finance and insurance companies also are in the market for data center space, improving the market's outlook.
LoopNet improves site, adds paid service option
Following the completion of its merger with Los Angeles-based PropertyFirst.com Inc. in July, San Francisco-based online giant LoopNet has upgraded its commercial property listing Web site, www.loopnet.com, and added a paid membership option.
The new site integrates the property listings and membership databases of LoopNet and PropertyFirst. The merger makes available for consideration nearly $130 billion worth of commercial properties for sale and 2 billion sq. ft. of space for lease in 90 markets across the United States.
Currently, 225,000, buyers, tenants and owners are registered to use the service. The new LoopNet site includes personalization options for property input forms and listing management capabilities.
The premium membership costs $39.95 per month and gives users top placement in property search results, prospect lists with names and contact information, expanded search results and the option to limit who sees their listings.
The free basic membership allows members to post listings for sale or lease at no charge.
Web-based listing BeyondGeo maps properties for viewers
Gardiner, Maine-based Blue Marble Geographics, a developer of geographic software products, recently unveiled BeyondGeo, an interactive mapping tool for real estate listings.
BeyondGeo allows real estate companies to publish realty listings in map form on the real estate companies' own Web sites, with each listing linked to a database of property information that includes audio and video files. Users of the BeyondGeo mapping service can zoom down to street level and access property information by clicking on a location with a mouse. Users also can highlight locations on the map according to characteristics such as location, price and number of rooms. Blue Marble Geographics provides an initial library of custom-designed maps that can be expanded by uploading town parcel maps available from municipal offices.