THE RENEWAL BOMB
In the go-go days of 2000, many high-flying dot-com firms signed three-year leases. Now, it's rollover time. Of the 37 office markets CoStar Group tracked rent comparisons for over that three-year period, Austin, Texas, has suffered the highest drop in quoted rental rates, raising its lease rollover risk significantly. By comparison, Seattle's exposure is more moderate.
|Quoted Rental Rate||Vacancy Rate|
|Market||1Q 2000||4Q 2002||Percent Decrease||1Q 2000||4Q 2002||Percent Increase|
|New York City||$41.30||$39.55||4.24%||9.7||10.2||5.15%|
| *2000 as of fourth quarter. |
**2000 as of third quarter.
|Source: CoStar Group Inc.|
Office developers have dramatically curtailed building activity over the past few years in light of the soft economy. Most industry observers agree that's a good sign for the long-term health of the sector. But building activity in the apartment sector has slowed only slightly, which could delay a recovery.
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Only five of the top 25markets experienced occupancy gains in 2002. Norfolk, Va., home to one of the East Coast's largest naval bases, led the way with a 5% increase in occupancies in 2002 over 2001.
WHERE THE JOBS ARE
Of the 65 metro areas tracked by Lend Lease Real Estate, 25 are showing a slight rise in the employment growth rate. Las Vegas is the clear frontrunner, while San Jose, Calif., has posted the biggest losses.
|Top Five Job Growth Markets|
|Bottom Five Job Growth Markets|
|65.||San Jose, Calif.||-3.2%|
|Source: Lend Lease Real Estate Investments|
THE UPPER CRUST
Commanding the biggest bucks in America, a small group of households has annual household incomes topping $200,000. Where are they? They cluster in power centers like New York and Washington, D.C., and scenic metros like West Palm Beach, Fla., and Santa Barbara, Calif.
|Rank/Metro||Number of Households||Percent|
|1.||San Francisco-Oakland-San Jose, Calif. CMSA||152,989||6.0%|
|2.||Naples, Fla. MSA||5,994||5.8%|
|3.||New York CMSA||366,594||4.7%|
|4.||West Palm Beach MSA||21,898||4.6%|
|5.||Washington, D.C. CMSA||112,181||3.9%|
|7.||Santa Barbara, Calif. MSA||5,054||3.7%|
|9.||Los Angeles CMSA||180,381||3.4%|
|Note: Statistical ties are due to rounding.|
|Source: American Demographics analysis of Census 2000 data|