OFFICE MARKET AT-A-GLANCE
There's hope on the horizon for the national office market. The vacancy rate for CBD office space dropped from 15.3% in the first quarter of 2003 to 14.1% in the second quarter. In addition, CBD leasing activity was up to 29 million sq. ft. from 17.6 million sq. ft. in the first quarter.
|Inventory (sq. ft.)||1.1 billion||1.7 billion|
|Average Rental Rates||$26.48||$23.28|
|Leasing Activity (sq.ft.)||29.0 million||64.4 million|
|YTD Overall Absorption (sq. ft.)||-19.2 million||-16.5 million|
|YTD Investment Sales Activity (sq. ft.)||20.1 million||31.4 million|
|Source: Cushman & Wakefield|
With the Iraqi offensive completed, the SARS scare ending and the upturn in the stock market, conditions seem ready to improve for the beleagueredsector. And developers are ready to capitalize on an upswing. Case in point: the number of completed upscale hotel projects is expected to increase a whopping 74% between 2003 and 2004.
|2003 Projects||Rooms||2004 Projects||Rooms|
|Midscale With Food & Beverage||44||3,362||42||3,586|
|Midscale Without Food & Beverage||261||21,425||304||25,981|
|Source: Lodging Econometrics|
MULTIFAMILY JITTERS INCREASE
Theapartment market finished the second quarter with a 6.8% vacancy rate, its highest in a decade, reports Marcus & Millichap. But the volume of supply is moving in the right direction: Completions of apartment complexes have declined every year since 2001.
POSITIVE SIGNS OF JOB GROWTH
There are a fewof the country that are actually experiencing job growth. The South has remained stable over the past year, while the West is even experiencing a slight up-tick in employment. Washington, D.C., with its focus on federal government, remains somewhat insulated from the rest of the nation's employment troubles.
|Metropolitan Statistical Area||Annual Job Growth|
|West Palm Beach, Fla.||4.1%||5.2%||1.1%||2.7%|
|Source: Census Bureau/Reappoint/GMAC Institutional Advisors|
Metros with a high diversity quotient, or that have a large senior population, are expected to grow the fastest over the next 25 years. Areas with a low diversity quotient are more likely to shrink.
|1. Laredo, Texas||194,636||295,656||367,815||89.0%|
|2. Punta Gorda, Fla.||142,297||215,186||265,542||86.6%|
|3. Las Vegas||1,581,525||2,355,460||2,897,008||83.2%|
|5. Provo, Utah||370,532||531,378||643,683||73.7%|
|7. Naples, Fla.||253,806||350,581||418,739||65.0%|
|8. Medford, Ore.||181,824||248,931||295,966||62.8%|
|9. W. Palm Beach, Fla.||1,137,775||1,551,564||1,837,450||61.5%|
|10. Wilmington, N.C.||234,816||319,409||378,676||61.3%|
|Source: Woods & Poole Economics; MapInfo, 2003|