North America Office Highlights 3q 2009
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COLLIERS INTERNATIONAL
|
NORTH AMERICA
Highlights OFFICE
|
THIRD QUARTER
|
2009
Office Space Markets Continue to Falter – But at a Reduced Rate Ross J. Moore | Executive Vice President, Market and Economic Research
Q3 2009
Q4 2009*
VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE *Projected, relative to prior period
USA OFFICE MARKET SUMMARY STATISTICS THIRD QUARTER 2009
Vacancy Rate Q3 2009: 16.03% Change from Q2 2009: 0.57% Absorption Q3 2009: –17.7 Million Square Feet
For the seventh consecutive quarter, tenants returned more space to the market than they leased, helping to push the national vacancy rate up for the eighth consecutive three-month period. A limited supply of office development also came on the market during the third quarter, helping to put upward pressure on the U.S. office vacancy rate. Rents again moved downward as landlords competed for tenants in an attempt to keep occupancies from declining further. This was again more apparent in downtown markets, but suburban rents also moved lower. The last quarter of 2009 and early 2010 will see a further weakening in office market fundamentals, but not to the same extent as construction dries up and companies no longer feel the need to dispose of space. The peak in vacancy is now in sight; soon the long, slow move to recovery can begin. Vacancies continue to go up. The U.S. national office vacancy rate again moved higher during the third quarter, marking the eighth consecutive increase. Even though sublease space increased by just 1.4 million square feet (MSF) to total 88.1 MSF (10.9% of vacant space), the overall vacancy rate increased 57 basis points to register 16.03%. Vacancy levels are now back Q3 2004 levels. The downtown vacancy rate increased 37 basis points to register 14.15%, while suburban vacancies increased 66 basis points to total 16.92%. Canadian vacancy rates also moved higher, with CBD vacancies rising 82 basis points to 6.14%, compared with suburban vacancies, which increased 32 basis points to 8.53%. Office tenants still returning space to the market. Third quarter absorption was again negative, with occupied space contracting by 17.7 MSF. This was the seventh consecutive quarter of contraction and was significantly worse than a year ago, when absorption was -2.2 MSF, but a sizeable improvement from Q2 when occupied space fell by 25.1 MSF. Companies continue to shed space, but the rate at which vacancy is entering the market looks to have slowed and Q2 may mark the low point for this cycle. Canadian markets also recorded a contraction in occupied space with 82,000 square feet returned to the market.
New Construction Q3 2009: 16.8 Million Square Feet
Asking Rents Per Square Foot (Change from Q2 2009): Downtown Class A: $40.09 (-2.7%) Suburban Class A: $26.95 (-1.6%) Tenant Inducements Per Square Foot (Months of Free Rent): Downtown Class A: $31.60 (4.8)
30
16% 15
20
Million Square Feet
Under Construction: 51.0 Million Square Feet
continued on page 7
USA OFFICE MARKET Q3 2008 – Q3 2009
14 10
13
0
Vacancy (%)
MARKET INDICATORS
Office leasing markets across most of North America suffered through another difficult quarter with rising vacancy levels and falling rents, but signs were beginning to emerge that the worst may be past. With the U.S. economy showing hints of expansion and a noticeable improvement in financial markets, many businesses were beginning to express an interest in signing new leases after a prolonged period of inactivity. Many remain concerned, however, over the continued loss of jobs in almost all regions and all sectors of the economy. Health and education remain the only two exceptions.
12
-10 -20 -30
Q3 2008
Q4 2008
Absorption
Q1 2009
Q2 2009
Completions
Q3 2009 Vacancy
www.colliers.com Copyright © 2009 Colliers International. Colliers International is a worldwide affiliation of independently owned and operated companies.
COLLIERS INTERNATIONAL
1
UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas/Ft. Worth, TX Denver, CO Detroit, MI Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New York, NY - Downtown Manhattan New York, NY - Midtown Manhattan New York, NY - Midtown S. Manhattan Oakland, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa, FL Washington, DC West Palm Beach/Palm Beach Co., FL USA TOTAL/AVERAGE
2
DOWNTOWN OFFICE
EXISTING NEW UNDER INVENTORY (SF) SUPPLY CONSTRUCTION SEPT. 30, 2009 Q3 2009 (SF) (SF) 56,040,000 2,931,000 20,105,000 3,470,000 58,188,000 2,064,000 18,851,000 131,128,000 12,707,000 30,470,000 4,631,000 9,673,000 35,961,000 26,648,000 30,801,000 3,206,000 9,129,000 3,133,000 10,096,000 8,064,000 37,810,000 11,559,000 15,921,000 11,288,000 3,356,000 6,597,000 31,493,000 10,241,000 8,023,000 15,569,000 10,620,000 26,482,000 7,513,000 89,744,000 257,741,000 98,339,000 17,023,000 11,600,000 41,910,000 19,766,000 22,370,000 34,302,000 3,726,000 1,326,000 18,290,000 10,101,000 82,991,000 7,593,000 58,461,000 11,452,000 8,510,000 9,233,000 116,757,000 9,559,000 1,604,561,000
COLLIERS INTERNATIONAL
0 0 537,000 0 0 0 8,000 1,129,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 16,000 0 0 0 0 0 0 0 0 0 0 0 329,000 0 0 12,000 0 0 0 171,000 0 0 0 0 158,000 0 658,000 0 24,000 0 1,366,000 0 4,407,000
719,000 0 278,000 0 1,664,000 0 2,413,000 1,174,000 825,000 0 190,000 0 0 496,000 0 0 0 0 0 0 1,817,000 0 220,000 0 0 0 0 0 0 1,973,000 0 0 235,000 4,600,000 1,109,000 315,000 62,000 0 0 1,045,000 0 369,000 0 0 0 40,000 50,000 0 3,570,000 0 0 0 6,538,000 0 29,703,000
ALL INVENTORY
VACANCY RATE (%) JUNE 30, 2009 14.0 7.8 18.8 10.6 12.7 9.3 6.1 14.9 17.4 16.1 14.7 15.3 21.4 14.4 16.0 10.5 11.4 24.1 18.8 10.9 13.1 15.5 11.7 23.3 10.7 14.6 14.8 10.0 14.3 15.7 19.1 17.0 19.2 10.6 13.7 13.8 12.3 16.9 11.1 16.9 19.8 8.1 10.8 21.8 10.0 15.0 14.1 24.4 11.3 21.4 18.8 14.9 9.6 17.1 13.78
VACANCY RATE (%) SEPT. 30, 2009 13.6 7.8 21.4 12.1 13.0 9.2 6.3 15.8 18.6 16.0 24.5 14.8 21.5 15.3 15.6 9.1 11.2 24.1 18.8 11.8 13.1 15.5 12.7 22.5 12.1 13.2 15.1 10.4 14.3 16.0 19.5 18.1 19.2 10.8 13.8 14.2 12.8 16.8 11.5 16.6 21.0 8.5 7.9 22.4 8.3 14.5 14.4 24.4 12.2 22.8 18.7 15.3 10.3 18.5 14.15
ABSORPTION Q3 2009 (SF)
ABSORPTION YTD 2009 (SF)
231,000 1,000 (88,000) (51,000) (17,000) 4,000 (32,000) (220,000) 126,000 32,000 (456,000) 60,000 (3,000) (125,000) 75,000 46,000 17,000 0 4,000 (10,000) 16,000 (4,000) (160,000) 88,000 (38,000) 90,000 (94,000) (33,000) (5,000) (40,000) (46,000) (35,000) 0 (222,000) (121,000) (427,000) (99,000) 15,000 (182,000) 64,000 (244,000) (101,000) 11,000 (7,000) 323,000 45,000 (137,000) (75,000) 22,000 (120,000) 35,000 (32,000) 88,000 (142,000) (1,973,000)
259,000 (37,000) (141,000) (90,000) (1,177,000) (53,000) (333,000) (2,238,000) 123,000 (94,000) (578,000) (58,000) (15,000) (414,000) (65,000) 81,000 6,000 (6,000) (457,000) (99,000) (213,000) (70,000) (173,000) 27,000 (134,000) 221,000 (50,000) 18,000 (98,000) (287,000) (285,000) (275,000) (176,000) (570,000) (6,892,000) (2,821,000) (239,000) (189,000) (727,000) (515,000) (2,034,000) (263,000) (49,000) (10,000) 542,000 81,000 (1,379,000) (259,000) (1,304,000) (110,000) (22,000) (148,000) 31,000 (73,000) (23,831,000)
UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas/Ft. Worth, TX Denver, CO Detroit, MI Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New York, NY - Downtown Manhattan New York, NY - Midtown Manhattan New York, NY - Midtown S. Manhattan Oakland, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa, FL Washington, DC West Palm Beach/Palm Beach Co., FL USA TOTAL/AVERAGE
EXISTING INVENTORY (SF) SEPT. 30, 2009 30,789,000 670,000 9,807,000 2,038,000 39,558,000 1,013,000 13,280,000 72,129,000 5,869,000 8,932,000 1,896,000 4,308,000 22,524,000 18,022,000 12,245,000 1,039,000 4,519,000 1,838,000 6,337,000 4,700,000 27,838,000 6,504,000 7,084,000 6,166,000 700,000 2,378,000 14,789,000 3,621,000 1,901,000 7,895,000 5,319,000 13,240,000 3,943,000 55,574,000 162,992,000 14,176,000 10,198,000 5,669,000 30,859,000 9,545,000 13,226,000 14,745,000 2,732,000 548,000 8,661,000 6,977,000 52,123,000 3,365,000 29,524,000 6,893,000 8,510,000 4,840,000 77,589,000 3,002,000 884,640,000
VACANCY RATE (%) JUNE 30, 2009 18.8 7.7 16.3 5.5 12.3 6.5 5.2 14.9 14.5 13.2 13.7 13.2 22.3 13.5 12.3 12.8 17.6 20.3 19.5 11.5 8.5 19.0 14.8 20.6 10.5 10.6 12.1 9.1 23.7 12.7 12.8 12.8 20.8 7.8 13.5 7.9 9.7 20.3 10.8 16.2 18.7 6.2 9.8 16.4 9.7 15.6 13.7 32.8 10.7 21.3 18.8 18.0 8.2 22.0 12.9
DOWNTOWN OFFICE
VACANCY RATE (%) SEPT. 30, 2009 17.8 7.7 21.2 6.4 11.8 6.5 5.4 16.2 14.2 12.7 12.8 13.3 22.3 15.1 14.1 9.7 16.8 20.3 19.5 12.7 8.5 18.8 15.9 19.4 10.5 10.0 12.4 9.1 23.1 12.0 12.9 12.4 20.6 8.3 13.7 7.4 10.0 19.1 11.3 16.2 20.0 6.2 6.0 16.7 9.7 15.1 14.2 33.5 14.9 22.3 18.7 18.5 12.0 22.3 13.7
CLASS A
AVERAGE ANNUAL YTD ABSORPTION ABSORPTION QUOTED RENT QUARTERLY CHANGE Q3 2009 YTD 2009 (US$ PSF) CHANGE IN IN RENT (SF) (SF) SEPT. 30, 2009 RENT (%) (%) 309,000 447,000 0 (17,000) (30,000) (101,000) (19,000) (35,000) 179,000 (561,000) 0 0 (5,000) (182,000) 44,000 (977,000) 27,000 14,000 74,000 33,000 18,000 (87,000) (9,000) (58,000) (7,000) 78,000 (137,000) (436,000) 8,000 (14,000) 32,000 26,000 34,000 76,000 0 (57,000) 4,000 (457,000) (1,000) (28,000) (14,000) (132,000) 11,000 (86,000) (75,000) (2,000) 76,000 7,000 0 0 13,000 110,000 (42,000) 48,000 0 102,000 11,000 (51,000) 48,000 (164,000) (4,000) (15,000) 55,000 (48,000) 8,000 (131,000) (327,000) (366,000) (43,000) (4,006,000) 66,000 (234,000) (23,000) (200,000) 74,000 (10,000) (147,000) (654,000) (125,000) (436,000) (178,000) (1,075,000) 25,000 18,000 3,000 (20,000) (2,000) (12,000) (5,000) 145,000 33,000 87,000 (113,000) (819,000) (33,000) (156,000) 256,000 (591,000) (28,000) (16,000) 35,000 (50,000) (24,000) (129,000) 394,000 516,000 (7,000) 37,000 440,000 (10,668,000)
21.30 (2.97) 17.40 0.00 25.00 0.00 20.30 (1.22) 47.90 (4.27) 28.50 (1.72) 28.90 (4.61) 33.00 (7.04) 23.50 0.00 20.80 (0.86) 19.80 0.00 23.10 0.00 25.50 0.00 26.00 (7.14) 22.50 (0.57) 25.20 0.00 32.00 0.03 21.50 0.00 23.50 0.00 35.80 (1.70) 37.50 (3.43) 20.30 0.00 20.50 (2.38) 20.10 (0.35) 39.30 0.00 16.40 0.00 39.40 (1.20) 21.10 0.00 16.90 0.00 43.40 (0.07) 22.00 0.00 29.80 12.48 22.30 0.27 45.70 (6.03) 68.40 (1.82) 49.50 (3.38) 32.50 (4.91) 26.00 (5.96) 25.80 0.16 26.70 (7.19) 27.00 (0.44) 25.10 (0.04) 22.30 (1.77) 22.20 0.00 33.20 (2.81) 31.70 (5.38) 37.30 4.99 37.80 0.64 26.00 (18.95) 19.00 (7.68) 12.00 (38.65) 23.50 10.78 49.60 (0.12) 39.00 1.46 40.10 (weighted) (2.73) 28.70 (equal) (2.10)
(7.32) 0.00 3.77 1.66 (22.61) 1.79 (10.12) (15.38) (0.34) 4.63 (3.18) 1.05 (1.92) (23.53) 0.72 (4.55) (1.81) (1.73) (1.35) (4.20) (2.50) (1.51) (2.38) 0.45 0.00 3.81 4.79 (1.68) (0.06) (1.50) 0.00 9.91 8.39 (19.21) (16.72) (16.53) (4.24) (8.12) 0.39 (14.22) (1.32) (1.14) (3.26) (3.14) (2.81) (8.01) (13.51) (7.35) (19.12) (7.68) (41.86) 4.53 (1.20) (3.01) (12.59) (6.36)
COLLIERS INTERNATIONAL
3
UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas/Ft. Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New Jersey - Central New Jersey - Northern New York - Fairfield County, CT New York - Westchester County, NY Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Tampa, FL Washington, DC - N.Virginia Washington, DC - Suburban, MD West Palm Beach/Palm Beach Co., FL USA TOTAL/AVERAGE
4
SUBURBAN OFFICE
EXISTING NEW UNDER INVENTORY (SF) SUPPLY CONSTRUCTION SEPT. 30, 2009 Q3 2009 (SF) (SF) 184,382,000 5,931,000 49,322,000 10,511,000 100,505,000 7,986,000 54,671,000 106,494,000 19,452,000 73,524,000 4,886,000 16,841,000 259,480,000 126,873,000 98,875,000 3,580,000 17,698,000 44,862,000 4,433,000 14,322,000 7,690,000 156,979,000 19,879,000 41,157,000 35,604,000 37,775,000 7,461,000 23,060,000 165,641,000 9,664,000 27,281,000 62,687,000 17,769,000 44,420,000 25,221,000 104,200,000 159,014,000 57,371,000 44,229,000 15,877,000 77,207,000 52,836,000 108,189,000 107,884,000 17,896,000 43,771,000 41,005,000 5,444,000 88,453,000 67,337,000 33,478,000 53,156,000 84,996,000 38,963,000 71,214,000 151,398,000 74,781,000 28,864,000 3,414,481,000
COLLIERS INTERNATIONAL
1,376,000 8,000 0 0 478,000 0 74,000 0 30,000 32,000 0 145,000 1,281,000 222,000 21,000 0 0 187,000 0 0 48,000 2,131,000 0 66,000 180,000 40,000 0 147,000 115,000 0 0 1,064,000 (41,000) 274,000 127,000 176,000 14,000 0 0 0 0 546,000 0 378,000 0 73,000 (66,000) 0 368,000 450,000 0 485,000 117,000 146,000 26,000 1,001,000 691,000 11,000 12,422,000
1,114,000 39,000 380,000 298,000 651,000 0 473,000 390,000 707,000 197,000 0 192,000 1,937,000 0 266,000 0 0 172,000 0 0 0 717,000 307,000 220,000 0 0 67,000 292,000 1,535,000 0 148,000 568,000 0 156,000 444,000 176,000 0 975,000 0 0 81,000 312,000 1,261,000 919,000 0 0 836,000 0 661,000 252,000 0 1,105,000 358,000 616,000 184,000 1,681,000 503,000 82,000 21,273,000
ALL INVENTORY
VACANCY RATE (%) JUNE 30, 2009 16.4 11.3 18.3 19.2 19.4 21.5 15.0 23.1 23.0 10.4 22.0 15.9 16.5 14.2 18.5 26.1 13.8 13.8 22.5 18.3 9.3 15.9 22.7 16.1 17.1 24.5 8.3 23.3 15.6 17.8 12.9 14.0 16.4 20.2 12.9 17.2 11.2 18.5 16.4 17.2 20.2 15.5 15.9 22.2 14.8 15.1 21.0 20.8 15.9 18.3 19.9 19.2 10.9 9.5 14.8 10.6 11.5 20.4 16.25
VACANCY RATE (%) SEPT. 30, 2009 17.4 10.9 18.7 19.7 19.5 21.0 15.4 23.3 23.2 10.2 21.5 17.1 16.9 15.1 18.6 25.9 14.5 14.8 22.5 18.4 9.8 16.9 22.7 17.1 17.8 24.7 8.0 23.7 15.9 18.5 12.9 15.6 18.1 20.6 12.6 18.4 14.2 20.1 16.4 18.2 20.6 16.7 16.1 22.9 14.4 15.2 21.1 20.8 16.3 18.0 20.2 20.7 12.1 9.8 15.2 10.9 12.2 21.4 16.92
ABSORPTION Q3 2009 (SF)
ABSORPTION YTD 2009 (SF)
(602,000) (11,000) (163,000) (52,000) (322,000) 33,000 (333,000) (231,000) (67,000) 185,000 23,000 (171,000) (59,000) (45,000) (411,000) 6,000 (122,000) (251,000) 0 (9,000) 10,000 (781,000) (23,000) (496,000) (83,000) (1,000) 18,000 (98,000) (362,000) (66,000) (4,000) (52,000) (297,000) 77,000 171,000 (1,079,000) (4,785,000) (948,000) 21,000 (164,000) (278,000) (131,000) (198,000) (1,624,000) 49,000 (153,000) (128,000) 10,000 (32,000) 554,000 (81,000) (633,000) (458,000) (78,000) (298,000) (287,000) (173,000) (282,000) (15,766,000)
(1,537,000) 114,000 (321,000) (400,000) (2,055,000) 79,000 (605,000) (2,389,000) (128,000) (268,000) (191,000) (227,000) 24,000 (416,000) (814,000) (53,000) (93,000) (852,000) (80,000) (7,000) (72,000) (1,390,000) (262,000) (910,000) (324,000) (556,000) 39,000 (307,000) (4,109,000) (58,000) (10,000) (1,121,000) (314,000) (486,000) (180,000) (2,835,000) (4,326,000) (2,125,000) (176,000) (234,000) (2,012,000) (771,000) (360,000) (2,591,000) (1,643,000) (514,000) (955,000) (102,000) (292,000) 381,000 (1,091,000) (2,995,000) 549,000 206,000 (1,456,000) (144,000) (449,000) (689,000) (44,903,000)
UNITED STATES OF AMERICA
MARKET
EXISTING INVENTORY (SF) SEPT. 30, 2009
Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas/Ft. Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New Jersey - Central New Jersey - Northern New York - Fairfield County, CT New York - Westchester County, NY Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Tampa, FL Washington, DC - N.Virginia Washington, DC - Suburban, MD West Palm Beach/Palm Beach Co., FL USA TOTAL/AVERAGE
78,556,000 2,661,000 21,153,000 4,383,000 42,478,000 3,941,000 18,232,000 57,026,000 12,217,000 12,656,000 996,000 9,232,000 95,259,000 37,760,000 26,891,000 2,157,000 3,764,000 10,521,000 1,812,000 8,136,000 67,300,000 10,045,000 9,993,000 11,222,000 4,940,000 2,631,000 4,991,000 99,051,000 5,583,000 6,869,000 15,044,000 6,242,000 17,004,000 15,808,000 61,615,000 90,175,000 31,271,000 25,108,000 3,582,000 32,256,000 15,889,000 66,615,000 33,242,000 9,802,000 12,440,000 25,013,000 2,916,000 15,657,000 24,102,000 21,757,000 25,367,000 27,928,000 24,221,000 23,731,000 99,201,000 39,424,000 8,947,000 1,446,811,000
VACANCY RATE (%) JUNE 30, 2009 16.1 6.8 20.6 20.1 13.0 17.8 21.0 23.8 21.1 9.6 18.4 10.3 16.5 13.9 17.3 27.8 21.8 19.1 14.2 17.7 16.0 23.0 16.1 17.0 38.0 10.4 37.2 15.0 17.0 8.3 18.8 14.1 16.4 12.6 18.0 13.9 20.8 19.2 43.7 22.5 16.1 15.0 26.3 12.6 13.8 18.8 22.0 22.8 23.0 19.9 22.3 8.3 7.7 17.2 13.6 16.0 20.4 16.94
SUBURBAN OFFICE
VACANCY RATE (%) SEPT. 30, 2009 17.7 6.7 20.0 20.0 19.8 18.4 19.8 24.1 21.3 10.3 17.8 12.2 17.3 15.3 16.3 27.5 22.4 20.5 14.2 17.9 17.5 22.7 18.6 16.8 36.5 10.0 37.2 15.5 17.4 8.0 22.5 16.1 17.7 11.8 19.6 17.6 23.8 19.2 16.2 22.6 18.0 15.5 27.1 12.1 14.3 18.6 21.6 25.7 21.7 20.0 24.3 13.0 7.9 17.7 14.5 16.4 21.1 18.07
CLASS A
AVERAGE ANNUAL YTD ABSORPTION ABSORPTION QUOTED RENT QUARTERLY CHANGE Q3 2009 YTD 2009 (US$ PSF) CHANGE IN IN RENT (SF) (SF) SEPT. 30, 2009 RENT (%) (%) (178,000) 3,000 123,000 6,000 (27,000) (24,000) (111,000) (200,000) (33,000) (81,000) 6,000 (111,000) (177,000) 251,000 (107,000) 5,000 (25,000) (73,000) 0 (9,000) (347,000) 51,000 666,000 148,000 (31,000) 10,000 (14,000) (381,000) (15,000) 22,000 128,000 (125,000) 7,000 130,000 (812,000) (3,378,000) (930,000) 12,000 (11,000) (17,000) 141,000 (3,688,000) (56,000) 107,000 (72,000) (46,000) 11,000 (208,000) 636,000 (36,000) (176,000) (342,000) 68,000 (86,000) (70,000) 48,000 (58,000) (9,476,000)
(73,000) 81,000 337,000 (106,000) (189,000) 103,000 (294,000) (1,476,000) (11,000) (109,000) (48,000) (100,000) (13,000) 413,000 (434,000) (22,000) 56,000 (180,000) 0 (142,000) 136,000 (80,000) 186,000 107,000 (142,000) 145,000 (78,000) (2,429,000) 22,000 (59,000) (11,000) (264,000) (386,000) (58,000) (2,305,000) (2,501,000) (1,665,000) (224,000) (175,000) (778,000) (79,000) (3,597,000) (44,000) 124,000 (174,000) (321,000) (8,000) 55,000 945,000 (695,000) (1,437,000) 690,000 343,000 (696,000) 948,000 (267,000) 144,000 (16,835,000)
22.20 24.00 26.40 18.30 27.20 25.50 19.50 27.70 21.10 21.60 18.00 19.30 25.30 21.00 23.10 26.10 25.80 28.00 18.60 20.90 27.30 19.50 20.00 21.00 34.70 18.30 27.60 35.40 17.60 21.70 32.90 21.00 28.20 21.90 26.10 28.10 30.20 27.00 25.60 30.70 23.20 24.60 26.30 24.50 19.50 22.00 21.60 25.40 35.20 34.80 37.00 27.40 25.00 24.70 29.70 30.10 31.10 26.90 (weighted) 25.20 (equal)
(1.16) 0.00 0.00 (0.22) (9.70) (3.77) (2.01) (0.36) 0.05 1.46 0.00 (0.82) (0.98) (4.55) (0.99) 2.92 0.00 0.11 0.00 (0.24) (1.01) 0.00 (4.76) (5.53) (2.25) 0.00 0.88 (1.99) 0.00 0.00 (0.60) 0.00 2.58 0.78 (1.17) (1.09) (5.12) 0.04 (19.62) (1.54) (1.86) (1.64) (2.09) 5.70 (17.45) (0.86) 0.00 (1.40) (3.30) 0.00 (3.45) (2.29) 0.00 (1.44) (0.07) (0.46) 0.23 (1.55) (1.78)
(4.24) 0.00 1.15 (3.64) (15.27) 21.43 (2.50) 15.46 3.12 2.23 1.47 (0.41) (2.88) (16.00) (3.03) 2.44 (4.44) (10.68) 0.00 (0.66) (2.04) 1.40 (4.76) (7.23) (5.63) 0.00 (3.36) (6.94) (9.40) 1.40 (5.16) (30.81) 1.00 (2.54) (3.83) (3.27) (3.91) (5.07) (19.87) (13.22) (3.86) (2.07) (11.31) 0.99 (20.57) (1.61) (5.26) 0.95 (8.15) (11.31) (10.98) 36.53 (3.85) 1.81 7.34 (1.21) (5.45) (4.07) (4.04)
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CANADA
DOWNTOWN AND SUBURBAN OFFICE
ALL INVENTORY AND CLASS A
DOWNTOWN OFFICE – ALL INVENTORY
MARKET
EXISTING INVENTORY (SF) SEPT. 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montréal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto, ON Vancouver, BC CANADA TOTAL/AVERAGE
35,084,000 10,613,000 4,891,000 1,989,000 49,429,000 14,966,000 3,762,000 1,949,000 86,159,000 24,470,000 233,312,000
NEW SUPPLY Q3 2009 (SF)
UNDER CONSTRUCTION (SF)
VACANCY RATE (%) JUNE 30, 2009
874,000 0 0 203,000 0 360,000 29,000 23,000 1,381,000 (27,000) 2,842,000
4,595,000 578,000 0 0 0 520,000 0 103,000 3,190,000 0 8,986,000
VACANCY RATE (%) JUNE 30, 2009
VACANCY RATE (%) SEPT. 30, 2009
ABSORPTION Q3 2009 (SF)
ABSORPTION YTD 2009 (SF)
3.8 3.8 2.8 11.1 6.3 2.6 0.6 0.0 5.7 3.2 4.78
8.0 5.5 2.6 17.6 6.8 4.0 0.0 0.2 6.8 3.4 6.32
(299,000) (140,000) 16,000 20,000 (107,000) 233,000 6,000 (1,000) 14,000 (19,000) (277,000)
(653,000) (208,000) 11,000 20,000 (570,000) 151,000 2,000 3,000 257,000 (199,000) (1,186,000)
7.8 5.0 3.8 10.0 6.2 2.9 1.6 4.6 4.7 4.5 5.31
VACANCY RATE (%) SEPT. 30, 2009
10.7 6.1 3.9 16.5 6.6 3.8 1.3 4.2 5.0 4.5 6.14
ABSORPTION Q3 2009 (SF)
ABSORPTION YTD 2009 (SF)
(413,000) (121,000) 16,000 53,000 (238,000) 213,000 36,000 31,000 41,000 (4,000) (386,000)
(1,499,000) 254,000 (17,000) 57,000 (1,126,000) 130,000 50,000 34,000 452,000 (538,000) (2,203,000)
DOWNTOWN OFFICE – CLASS A
MARKET
EXISTING INVENTORY (SF) SEPT. 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montréal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto, ON Vancouver, BC CANADA TOTAL/AVERAGE
21,620,000 8,275,000 1,916,000 637,000 23,076,000 9,001,000 1,026,000 442,000 39,603,000 10,034,000 115,629,000
AVG. ANNUAL QUOTED RENT (C$ PSF) SEPT. 30, 2009
QUARTERLY CHANGE IN RENT (%)
45.50 (5.21) 46.60 (0.43) 31.50 0.00 26.50 (3.11) 30.70 (1.16) 47.50 (2.04) 34.80 0.00 30.00 0.00 52.70 (1.61) 45.50 3.41 44.80 (weighted) (1.46) 39.10 (equal) (1.08)
YTD CHANGE IN RENT (%)
(18.02) 2.33 2.88 11.43 (5.94) 5.30 (0.37) (8.71) 3.41 (4.78) (6.00)
SUBURBAN OFFICE – ALL INVENTORY
MARKET
EXISTING INVENTORY (SF) SEPT. 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montréal, QC Ottawa, ON Regina, SK Toronto, ON Vancouver, BC CANADA TOTAL/AVERAGE
17,239,000 8,285,000 6,011,000 2,393,000 22,590,000 19,896,000 533,000 96,313,000 28,139,000 201,400,000
NEW SUPPLY Q3 2009 (SF)
UNDER CONSTRUCTION (SF)
498,000 52,000 150,000 0 0 0 0 334,000 356,000 1,390,000
395,000 223,000 400,000 159,000 0 0 0 1,259,000 514,000 2,952,000
VACANCY RATE (%) JUNE 30, 2009
VACANCY RATE (%) SEPT. 30, 2009
ABSORPTION Q3 2009 (SF)
ABSORPTION YTD 2009 (SF)
12.7 8.2 19.7 8.7 8.1 11.6 1.4 6.9 11.1 8.99
12.4 9.9 19.0 9.2 7.7 11.9 0.2 7.3 12.4 9.39
460,000 (46,000) 152,000 (5,000) 209,000 (36,000) 6,000 116,000 108,000 964,000
870,000 (72,000) 256,000 102,000 349,000 (236,000) 22,000 857,000 (58,000) 2,090,000
VACANCY RATE (%) JUNE 30, 2009
11.0 10.3 14.7 9.0 9.1 9.7 1.4 6.7 8.1 8.21
VACANCY RATE (%) SEPT. 30, 2009
11.5 10.3 13.9 9.7 9.1 10.1 0.2 6.7 9.6 8.53
ABSORPTION Q3 2009 (SF)
ABSORPTION YTD 2009 (SF)
370,000 27,000 152,000 (16,000) 151,000 (70,000) 6,000 (237,000) (79,000) 304,000
410,000 48,000 297,000 112,000 431,000 (96,000) 22,000 (173,000) (353,000) 698,000
SUBURBAN OFFICE – CLASS A
MARKET
EXISTING INVENTORY (SF) SEPT. 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montréal, QC Ottawa, ON Regina, SK Toronto, ON Vancouver, BC CANADA TOTAL/AVERAGE
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8,058,000 4,308,000 2,571,000 1,078,000 12,195,000 11,645,000 533,000 44,717,000 13,009,000 98,117,000
AVG. ANNUAL QUOTED RENT (C$ PSF) SEPT. 30, 2009
QUARTERLY CHANGE IN RENT (%)
32.80 (5.76) 30.70 (1.79) 27.20 0.00 25.50 0.00 24.80 (0.40) 28.90 (3.76) 28.00 0.00 29.40 (1.34) 28.00 (9.68) 28.80 (weighted) (3.02) 28.40 (equal) (4.00)
YTD CHANGE IN RENT (%)
(12.67) (3.88) 2.91 (5.20) (10.20) (11.05) 0.00 (2.20) (9.68) (6.48) (6.99)
NORTH AMERICA
OFFICE INVESTMENT
Office Space Markets Continue to Falter
UNITED STATES OF AMERICA – OFFICE INVESTMENT
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cleveland, OH Columbus, OH Dallas/Ft. Worth, TX Denver, CO Fresno, CA Ft. Lauderdale/Broward County, FL Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New York - Fairfield County, CT New York - Westchester County, NY New York, NY - Downtown Manhattan New York, NY - Midtown Manhattan New York, NY - Midtown S. Manhattan Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco Peninsula, CA San Francisco, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa, FL Washington, DC Washington, DC - N.Virginia Washington, DC - Suburban, MD West Palm Beach/Palm Beach Co., FL USA AVERAGE
CBD SALES PRICE (US$ PSF) 189.00 – 200.00 151.00 282.27 235.00 225.00 161.00 115.00 36.89 – 195.00 175.00 – 250.00 135.00 0.00 110.00 245.00 – 88.00 – 292.00 339.00 225.00 175.00 98.00 – – 200.00 375.00 300.00 250.00 – – 85.00 69.07 294.00 – 150.00 135.00 225.00 – – 218.00 – 129.21 – 145.00 – 410.00 – 410.00 103.00 195.27
CBD SUBURBAN SUBURBAN CAP RATE SALES PRICE CAP RATE (%) (US$ PSF) (%) 8.50 – 8.50 7.60 8.50 8.50 8.50 7.50 10.00 – – 9.25 9.00 – 8.50 8.50 0.00 9.00 9.00 – 9.00 – 4.90 – 8.00 8.00 10.25 – – 8.00 7.00 8.00 8.00 – – 9.00 – 9.00 – 9.50 9.00 8.50 – – 6.50 – – – 9.00 – 7.50 – 7.40 9.40 8.14
96.00 250.00 175.00 151.00 73.43 140.00 120.00 112.00 115.00 – 75.00 125.00 197.50 102.00 250.00 76.00 0.00 130.00 120.00 159.32 110.00 189.00 262.00 221.50 180.00 175.00 135.00 200.00 150.00 – – – 200.00 244.00 150.00 135.00 135.00 220.10 177.29 110.00 180.00 200.00 134.68 – – 522.75 – 100.00 – 135.00 – 256.80 233.00 167.00 164.23
8.25 – 9.00 7.60 9.25 10.00 9.25 8.20 9.50 – 9.25 9.50 8.50 8.60 8.50 10.00 0.00 0.09 10.00 – 9.00 6.90 6.10 6.87 8.00 8.50 9.50 9.00 9.00 – – – 8.00 6.60 9.00 9.00 9.07 9.20 7.47 10.00 8.50 7.75 – 6.50 – – – 10.50 – 9.50 – 8.57 8.40 8.20 8.21
Continued from page 1
Rents continue to decline. For the fifth consecutive quarter, downtown lease rates dropped, with Q3 Class A asking rents dipping by 2.7% to $40.09 per square foot. Major markets such as Lower Manhattan, Boston, Chicago, Denver and Seattle contributed to the quarterly decline. Suburban asking rents also fell during the quarter, declining by 1.6% to $26.95 per square foot. Year-over-year CBD rents are down 18.8% while suburban rents are down 5.4%. Office rents in Canada also fell with CBD rents declining 1.5% during the quarter while suburban rents moved 3.0% lower. Office development pipeline continues to empty out. Construction activity continued to decline, with Q3 under construction activity falling by 14.2 MSF to total 51.0 MSF. Construction activity is expected maintain this trend, leaving the development pipeline below levels witnessed in early 2005, when just 40.0 MSF of office development was underway. Third quarter office completions totaled 16.8 MSF, a slight increase from the 16.3 MSF recorded in the second quarter, but a modest decline from the third quarter of 2008 when construction registered 20.3 MSF.
CANADA – OFFICE INVESTMENT CBD CBD SUBURBAN SUBURBAN SALES PRICE CAP RATE SALES PRICE CAP RATE MARKET (C$ PSF) (%) (C$ PSF) (%) Calgary, AB 400.00 7.50 300.00 8.00 Edmonton, AB – – 147.09 7.99 Halifax, NS – – 98.50 8.25 KitchenerWaterloo, ON 160.00 8.00 110.00 7.75 Montréal, QC 275.00 7.50 175.00 8.25 Ottawa, ON – 8.00 130.00 8.38 Regina, SK 139.00 7.70 – – Saskatoon, SK 175.00 8.50 – – Toronto, ON 229.00 7.50 220.00 8.50 Vancouver, BC 425.00 5.75 300.00 7.50 CANADA AVERAGE 257.57 7.56 185.07 8.08
GLOSSARY Inventory – Includes all existing multi- or single-tenant leased and owneroccupied office properties greater than or equal to 10,000 square feet (net rentable area). In some larger markets this minimum size threshold may vary up to 50,000 square feet. Does not include medical or government buildings. Vacancy Rate – Percentage of total inventory physically vacant as at the survey date including direct vacant and sublease space. Absorption –Net change in physically occupied space over a given period of time. New Supply – Includes completed speculative and build-to-suit construction. New supply quoted on a net basis after any demolitions or conversions. Annual Quoted Rent – Includes all costs associated with occupying a full floor in the mid-rise portion of a Class A building inclusive of taxes, insurance, maintenance, janitorial and utilities (electricity surcharges added where applicable). All office rents in this report are quoted on an annual, gross per square foot basis. Rent calculations do not include sublease space. Cap Rate – (Or going-in cap rate) Capitalization rates in this survey are based on multi-tenant institutional grade buildings fully leased at market rents. Cap rates are calculated by dividing net operating income (NOI) by purchase price. Note: SF = Square Feet; PSF = Per Square Foot; CBD = Central Business District
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
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THIRD QUARTER
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2009
Office Space Markets Continue to Falter – But at a Reduced Rate Ross J. Moore | Executive Vice President, Market and Economic Research
Q3 2009
Q4 2009*
VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE *Projected, relative to prior period
USA OFFICE MARKET SUMMARY STATISTICS THIRD QUARTER 2009
Vacancy Rate Q3 2009: 16.03% Change from Q2 2009: 0.57% Absorption Q3 2009: –17.7 Million Square Feet
For the seventh consecutive quarter, tenants returned more space to the market than they leased, helping to push the national vacancy rate up for the eighth consecutive three-month period. A limited supply of office development also came on the market during the third quarter, helping to put upward pressure on the U.S. office vacancy rate. Rents again moved downward as landlords competed for tenants in an attempt to keep occupancies from declining further. This was again more apparent in downtown markets, but suburban rents also moved lower. The last quarter of 2009 and early 2010 will see a further weakening in office market fundamentals, but not to the same extent as construction dries up and companies no longer feel the need to dispose of space. The peak in vacancy is now in sight; soon the long, slow move to recovery can begin. Vacancies continue to go up. The U.S. national office vacancy rate again moved higher during the third quarter, marking the eighth consecutive increase. Even though sublease space increased by just 1.4 million square feet (MSF) to total 88.1 MSF (10.9% of vacant space), the overall vacancy rate increased 57 basis points to register 16.03%. Vacancy levels are now back Q3 2004 levels. The downtown vacancy rate increased 37 basis points to register 14.15%, while suburban vacancies increased 66 basis points to total 16.92%. Canadian vacancy rates also moved higher, with CBD vacancies rising 82 basis points to 6.14%, compared with suburban vacancies, which increased 32 basis points to 8.53%. Office tenants still returning space to the market. Third quarter absorption was again negative, with occupied space contracting by 17.7 MSF. This was the seventh consecutive quarter of contraction and was significantly worse than a year ago, when absorption was -2.2 MSF, but a sizeable improvement from Q2 when occupied space fell by 25.1 MSF. Companies continue to shed space, but the rate at which vacancy is entering the market looks to have slowed and Q2 may mark the low point for this cycle. Canadian markets also recorded a contraction in occupied space with 82,000 square feet returned to the market.
New Construction Q3 2009: 16.8 Million Square Feet
Asking Rents Per Square Foot (Change from Q2 2009): Downtown Class A: $40.09 (-2.7%) Suburban Class A: $26.95 (-1.6%) Tenant Inducements Per Square Foot (Months of Free Rent): Downtown Class A: $31.60 (4.8)
30
16% 15
20
Million Square Feet
Under Construction: 51.0 Million Square Feet
continued on page 7
USA OFFICE MARKET Q3 2008 – Q3 2009
14 10
13
0
Vacancy (%)
MARKET INDICATORS
Office leasing markets across most of North America suffered through another difficult quarter with rising vacancy levels and falling rents, but signs were beginning to emerge that the worst may be past. With the U.S. economy showing hints of expansion and a noticeable improvement in financial markets, many businesses were beginning to express an interest in signing new leases after a prolonged period of inactivity. Many remain concerned, however, over the continued loss of jobs in almost all regions and all sectors of the economy. Health and education remain the only two exceptions.
12
-10 -20 -30
Q3 2008
Q4 2008
Absorption
Q1 2009
Q2 2009
Completions
Q3 2009 Vacancy
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UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas/Ft. Worth, TX Denver, CO Detroit, MI Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New York, NY - Downtown Manhattan New York, NY - Midtown Manhattan New York, NY - Midtown S. Manhattan Oakland, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa, FL Washington, DC West Palm Beach/Palm Beach Co., FL USA TOTAL/AVERAGE
2
DOWNTOWN OFFICE
EXISTING NEW UNDER INVENTORY (SF) SUPPLY CONSTRUCTION SEPT. 30, 2009 Q3 2009 (SF) (SF) 56,040,000 2,931,000 20,105,000 3,470,000 58,188,000 2,064,000 18,851,000 131,128,000 12,707,000 30,470,000 4,631,000 9,673,000 35,961,000 26,648,000 30,801,000 3,206,000 9,129,000 3,133,000 10,096,000 8,064,000 37,810,000 11,559,000 15,921,000 11,288,000 3,356,000 6,597,000 31,493,000 10,241,000 8,023,000 15,569,000 10,620,000 26,482,000 7,513,000 89,744,000 257,741,000 98,339,000 17,023,000 11,600,000 41,910,000 19,766,000 22,370,000 34,302,000 3,726,000 1,326,000 18,290,000 10,101,000 82,991,000 7,593,000 58,461,000 11,452,000 8,510,000 9,233,000 116,757,000 9,559,000 1,604,561,000
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0 0 537,000 0 0 0 8,000 1,129,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 16,000 0 0 0 0 0 0 0 0 0 0 0 329,000 0 0 12,000 0 0 0 171,000 0 0 0 0 158,000 0 658,000 0 24,000 0 1,366,000 0 4,407,000
719,000 0 278,000 0 1,664,000 0 2,413,000 1,174,000 825,000 0 190,000 0 0 496,000 0 0 0 0 0 0 1,817,000 0 220,000 0 0 0 0 0 0 1,973,000 0 0 235,000 4,600,000 1,109,000 315,000 62,000 0 0 1,045,000 0 369,000 0 0 0 40,000 50,000 0 3,570,000 0 0 0 6,538,000 0 29,703,000
ALL INVENTORY
VACANCY RATE (%) JUNE 30, 2009 14.0 7.8 18.8 10.6 12.7 9.3 6.1 14.9 17.4 16.1 14.7 15.3 21.4 14.4 16.0 10.5 11.4 24.1 18.8 10.9 13.1 15.5 11.7 23.3 10.7 14.6 14.8 10.0 14.3 15.7 19.1 17.0 19.2 10.6 13.7 13.8 12.3 16.9 11.1 16.9 19.8 8.1 10.8 21.8 10.0 15.0 14.1 24.4 11.3 21.4 18.8 14.9 9.6 17.1 13.78
VACANCY RATE (%) SEPT. 30, 2009 13.6 7.8 21.4 12.1 13.0 9.2 6.3 15.8 18.6 16.0 24.5 14.8 21.5 15.3 15.6 9.1 11.2 24.1 18.8 11.8 13.1 15.5 12.7 22.5 12.1 13.2 15.1 10.4 14.3 16.0 19.5 18.1 19.2 10.8 13.8 14.2 12.8 16.8 11.5 16.6 21.0 8.5 7.9 22.4 8.3 14.5 14.4 24.4 12.2 22.8 18.7 15.3 10.3 18.5 14.15
ABSORPTION Q3 2009 (SF)
ABSORPTION YTD 2009 (SF)
231,000 1,000 (88,000) (51,000) (17,000) 4,000 (32,000) (220,000) 126,000 32,000 (456,000) 60,000 (3,000) (125,000) 75,000 46,000 17,000 0 4,000 (10,000) 16,000 (4,000) (160,000) 88,000 (38,000) 90,000 (94,000) (33,000) (5,000) (40,000) (46,000) (35,000) 0 (222,000) (121,000) (427,000) (99,000) 15,000 (182,000) 64,000 (244,000) (101,000) 11,000 (7,000) 323,000 45,000 (137,000) (75,000) 22,000 (120,000) 35,000 (32,000) 88,000 (142,000) (1,973,000)
259,000 (37,000) (141,000) (90,000) (1,177,000) (53,000) (333,000) (2,238,000) 123,000 (94,000) (578,000) (58,000) (15,000) (414,000) (65,000) 81,000 6,000 (6,000) (457,000) (99,000) (213,000) (70,000) (173,000) 27,000 (134,000) 221,000 (50,000) 18,000 (98,000) (287,000) (285,000) (275,000) (176,000) (570,000) (6,892,000) (2,821,000) (239,000) (189,000) (727,000) (515,000) (2,034,000) (263,000) (49,000) (10,000) 542,000 81,000 (1,379,000) (259,000) (1,304,000) (110,000) (22,000) (148,000) 31,000 (73,000) (23,831,000)
UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas/Ft. Worth, TX Denver, CO Detroit, MI Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New York, NY - Downtown Manhattan New York, NY - Midtown Manhattan New York, NY - Midtown S. Manhattan Oakland, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa, FL Washington, DC West Palm Beach/Palm Beach Co., FL USA TOTAL/AVERAGE
EXISTING INVENTORY (SF) SEPT. 30, 2009 30,789,000 670,000 9,807,000 2,038,000 39,558,000 1,013,000 13,280,000 72,129,000 5,869,000 8,932,000 1,896,000 4,308,000 22,524,000 18,022,000 12,245,000 1,039,000 4,519,000 1,838,000 6,337,000 4,700,000 27,838,000 6,504,000 7,084,000 6,166,000 700,000 2,378,000 14,789,000 3,621,000 1,901,000 7,895,000 5,319,000 13,240,000 3,943,000 55,574,000 162,992,000 14,176,000 10,198,000 5,669,000 30,859,000 9,545,000 13,226,000 14,745,000 2,732,000 548,000 8,661,000 6,977,000 52,123,000 3,365,000 29,524,000 6,893,000 8,510,000 4,840,000 77,589,000 3,002,000 884,640,000
VACANCY RATE (%) JUNE 30, 2009 18.8 7.7 16.3 5.5 12.3 6.5 5.2 14.9 14.5 13.2 13.7 13.2 22.3 13.5 12.3 12.8 17.6 20.3 19.5 11.5 8.5 19.0 14.8 20.6 10.5 10.6 12.1 9.1 23.7 12.7 12.8 12.8 20.8 7.8 13.5 7.9 9.7 20.3 10.8 16.2 18.7 6.2 9.8 16.4 9.7 15.6 13.7 32.8 10.7 21.3 18.8 18.0 8.2 22.0 12.9
DOWNTOWN OFFICE
VACANCY RATE (%) SEPT. 30, 2009 17.8 7.7 21.2 6.4 11.8 6.5 5.4 16.2 14.2 12.7 12.8 13.3 22.3 15.1 14.1 9.7 16.8 20.3 19.5 12.7 8.5 18.8 15.9 19.4 10.5 10.0 12.4 9.1 23.1 12.0 12.9 12.4 20.6 8.3 13.7 7.4 10.0 19.1 11.3 16.2 20.0 6.2 6.0 16.7 9.7 15.1 14.2 33.5 14.9 22.3 18.7 18.5 12.0 22.3 13.7
CLASS A
AVERAGE ANNUAL YTD ABSORPTION ABSORPTION QUOTED RENT QUARTERLY CHANGE Q3 2009 YTD 2009 (US$ PSF) CHANGE IN IN RENT (SF) (SF) SEPT. 30, 2009 RENT (%) (%) 309,000 447,000 0 (17,000) (30,000) (101,000) (19,000) (35,000) 179,000 (561,000) 0 0 (5,000) (182,000) 44,000 (977,000) 27,000 14,000 74,000 33,000 18,000 (87,000) (9,000) (58,000) (7,000) 78,000 (137,000) (436,000) 8,000 (14,000) 32,000 26,000 34,000 76,000 0 (57,000) 4,000 (457,000) (1,000) (28,000) (14,000) (132,000) 11,000 (86,000) (75,000) (2,000) 76,000 7,000 0 0 13,000 110,000 (42,000) 48,000 0 102,000 11,000 (51,000) 48,000 (164,000) (4,000) (15,000) 55,000 (48,000) 8,000 (131,000) (327,000) (366,000) (43,000) (4,006,000) 66,000 (234,000) (23,000) (200,000) 74,000 (10,000) (147,000) (654,000) (125,000) (436,000) (178,000) (1,075,000) 25,000 18,000 3,000 (20,000) (2,000) (12,000) (5,000) 145,000 33,000 87,000 (113,000) (819,000) (33,000) (156,000) 256,000 (591,000) (28,000) (16,000) 35,000 (50,000) (24,000) (129,000) 394,000 516,000 (7,000) 37,000 440,000 (10,668,000)
21.30 (2.97) 17.40 0.00 25.00 0.00 20.30 (1.22) 47.90 (4.27) 28.50 (1.72) 28.90 (4.61) 33.00 (7.04) 23.50 0.00 20.80 (0.86) 19.80 0.00 23.10 0.00 25.50 0.00 26.00 (7.14) 22.50 (0.57) 25.20 0.00 32.00 0.03 21.50 0.00 23.50 0.00 35.80 (1.70) 37.50 (3.43) 20.30 0.00 20.50 (2.38) 20.10 (0.35) 39.30 0.00 16.40 0.00 39.40 (1.20) 21.10 0.00 16.90 0.00 43.40 (0.07) 22.00 0.00 29.80 12.48 22.30 0.27 45.70 (6.03) 68.40 (1.82) 49.50 (3.38) 32.50 (4.91) 26.00 (5.96) 25.80 0.16 26.70 (7.19) 27.00 (0.44) 25.10 (0.04) 22.30 (1.77) 22.20 0.00 33.20 (2.81) 31.70 (5.38) 37.30 4.99 37.80 0.64 26.00 (18.95) 19.00 (7.68) 12.00 (38.65) 23.50 10.78 49.60 (0.12) 39.00 1.46 40.10 (weighted) (2.73) 28.70 (equal) (2.10)
(7.32) 0.00 3.77 1.66 (22.61) 1.79 (10.12) (15.38) (0.34) 4.63 (3.18) 1.05 (1.92) (23.53) 0.72 (4.55) (1.81) (1.73) (1.35) (4.20) (2.50) (1.51) (2.38) 0.45 0.00 3.81 4.79 (1.68) (0.06) (1.50) 0.00 9.91 8.39 (19.21) (16.72) (16.53) (4.24) (8.12) 0.39 (14.22) (1.32) (1.14) (3.26) (3.14) (2.81) (8.01) (13.51) (7.35) (19.12) (7.68) (41.86) 4.53 (1.20) (3.01) (12.59) (6.36)
COLLIERS INTERNATIONAL
3
UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas/Ft. Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New Jersey - Central New Jersey - Northern New York - Fairfield County, CT New York - Westchester County, NY Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Tampa, FL Washington, DC - N.Virginia Washington, DC - Suburban, MD West Palm Beach/Palm Beach Co., FL USA TOTAL/AVERAGE
4
SUBURBAN OFFICE
EXISTING NEW UNDER INVENTORY (SF) SUPPLY CONSTRUCTION SEPT. 30, 2009 Q3 2009 (SF) (SF) 184,382,000 5,931,000 49,322,000 10,511,000 100,505,000 7,986,000 54,671,000 106,494,000 19,452,000 73,524,000 4,886,000 16,841,000 259,480,000 126,873,000 98,875,000 3,580,000 17,698,000 44,862,000 4,433,000 14,322,000 7,690,000 156,979,000 19,879,000 41,157,000 35,604,000 37,775,000 7,461,000 23,060,000 165,641,000 9,664,000 27,281,000 62,687,000 17,769,000 44,420,000 25,221,000 104,200,000 159,014,000 57,371,000 44,229,000 15,877,000 77,207,000 52,836,000 108,189,000 107,884,000 17,896,000 43,771,000 41,005,000 5,444,000 88,453,000 67,337,000 33,478,000 53,156,000 84,996,000 38,963,000 71,214,000 151,398,000 74,781,000 28,864,000 3,414,481,000
COLLIERS INTERNATIONAL
1,376,000 8,000 0 0 478,000 0 74,000 0 30,000 32,000 0 145,000 1,281,000 222,000 21,000 0 0 187,000 0 0 48,000 2,131,000 0 66,000 180,000 40,000 0 147,000 115,000 0 0 1,064,000 (41,000) 274,000 127,000 176,000 14,000 0 0 0 0 546,000 0 378,000 0 73,000 (66,000) 0 368,000 450,000 0 485,000 117,000 146,000 26,000 1,001,000 691,000 11,000 12,422,000
1,114,000 39,000 380,000 298,000 651,000 0 473,000 390,000 707,000 197,000 0 192,000 1,937,000 0 266,000 0 0 172,000 0 0 0 717,000 307,000 220,000 0 0 67,000 292,000 1,535,000 0 148,000 568,000 0 156,000 444,000 176,000 0 975,000 0 0 81,000 312,000 1,261,000 919,000 0 0 836,000 0 661,000 252,000 0 1,105,000 358,000 616,000 184,000 1,681,000 503,000 82,000 21,273,000
ALL INVENTORY
VACANCY RATE (%) JUNE 30, 2009 16.4 11.3 18.3 19.2 19.4 21.5 15.0 23.1 23.0 10.4 22.0 15.9 16.5 14.2 18.5 26.1 13.8 13.8 22.5 18.3 9.3 15.9 22.7 16.1 17.1 24.5 8.3 23.3 15.6 17.8 12.9 14.0 16.4 20.2 12.9 17.2 11.2 18.5 16.4 17.2 20.2 15.5 15.9 22.2 14.8 15.1 21.0 20.8 15.9 18.3 19.9 19.2 10.9 9.5 14.8 10.6 11.5 20.4 16.25
VACANCY RATE (%) SEPT. 30, 2009 17.4 10.9 18.7 19.7 19.5 21.0 15.4 23.3 23.2 10.2 21.5 17.1 16.9 15.1 18.6 25.9 14.5 14.8 22.5 18.4 9.8 16.9 22.7 17.1 17.8 24.7 8.0 23.7 15.9 18.5 12.9 15.6 18.1 20.6 12.6 18.4 14.2 20.1 16.4 18.2 20.6 16.7 16.1 22.9 14.4 15.2 21.1 20.8 16.3 18.0 20.2 20.7 12.1 9.8 15.2 10.9 12.2 21.4 16.92
ABSORPTION Q3 2009 (SF)
ABSORPTION YTD 2009 (SF)
(602,000) (11,000) (163,000) (52,000) (322,000) 33,000 (333,000) (231,000) (67,000) 185,000 23,000 (171,000) (59,000) (45,000) (411,000) 6,000 (122,000) (251,000) 0 (9,000) 10,000 (781,000) (23,000) (496,000) (83,000) (1,000) 18,000 (98,000) (362,000) (66,000) (4,000) (52,000) (297,000) 77,000 171,000 (1,079,000) (4,785,000) (948,000) 21,000 (164,000) (278,000) (131,000) (198,000) (1,624,000) 49,000 (153,000) (128,000) 10,000 (32,000) 554,000 (81,000) (633,000) (458,000) (78,000) (298,000) (287,000) (173,000) (282,000) (15,766,000)
(1,537,000) 114,000 (321,000) (400,000) (2,055,000) 79,000 (605,000) (2,389,000) (128,000) (268,000) (191,000) (227,000) 24,000 (416,000) (814,000) (53,000) (93,000) (852,000) (80,000) (7,000) (72,000) (1,390,000) (262,000) (910,000) (324,000) (556,000) 39,000 (307,000) (4,109,000) (58,000) (10,000) (1,121,000) (314,000) (486,000) (180,000) (2,835,000) (4,326,000) (2,125,000) (176,000) (234,000) (2,012,000) (771,000) (360,000) (2,591,000) (1,643,000) (514,000) (955,000) (102,000) (292,000) 381,000 (1,091,000) (2,995,000) 549,000 206,000 (1,456,000) (144,000) (449,000) (689,000) (44,903,000)
UNITED STATES OF AMERICA
MARKET
EXISTING INVENTORY (SF) SEPT. 30, 2009
Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas/Ft. Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New Jersey - Central New Jersey - Northern New York - Fairfield County, CT New York - Westchester County, NY Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Tampa, FL Washington, DC - N.Virginia Washington, DC - Suburban, MD West Palm Beach/Palm Beach Co., FL USA TOTAL/AVERAGE
78,556,000 2,661,000 21,153,000 4,383,000 42,478,000 3,941,000 18,232,000 57,026,000 12,217,000 12,656,000 996,000 9,232,000 95,259,000 37,760,000 26,891,000 2,157,000 3,764,000 10,521,000 1,812,000 8,136,000 67,300,000 10,045,000 9,993,000 11,222,000 4,940,000 2,631,000 4,991,000 99,051,000 5,583,000 6,869,000 15,044,000 6,242,000 17,004,000 15,808,000 61,615,000 90,175,000 31,271,000 25,108,000 3,582,000 32,256,000 15,889,000 66,615,000 33,242,000 9,802,000 12,440,000 25,013,000 2,916,000 15,657,000 24,102,000 21,757,000 25,367,000 27,928,000 24,221,000 23,731,000 99,201,000 39,424,000 8,947,000 1,446,811,000
VACANCY RATE (%) JUNE 30, 2009 16.1 6.8 20.6 20.1 13.0 17.8 21.0 23.8 21.1 9.6 18.4 10.3 16.5 13.9 17.3 27.8 21.8 19.1 14.2 17.7 16.0 23.0 16.1 17.0 38.0 10.4 37.2 15.0 17.0 8.3 18.8 14.1 16.4 12.6 18.0 13.9 20.8 19.2 43.7 22.5 16.1 15.0 26.3 12.6 13.8 18.8 22.0 22.8 23.0 19.9 22.3 8.3 7.7 17.2 13.6 16.0 20.4 16.94
SUBURBAN OFFICE
VACANCY RATE (%) SEPT. 30, 2009 17.7 6.7 20.0 20.0 19.8 18.4 19.8 24.1 21.3 10.3 17.8 12.2 17.3 15.3 16.3 27.5 22.4 20.5 14.2 17.9 17.5 22.7 18.6 16.8 36.5 10.0 37.2 15.5 17.4 8.0 22.5 16.1 17.7 11.8 19.6 17.6 23.8 19.2 16.2 22.6 18.0 15.5 27.1 12.1 14.3 18.6 21.6 25.7 21.7 20.0 24.3 13.0 7.9 17.7 14.5 16.4 21.1 18.07
CLASS A
AVERAGE ANNUAL YTD ABSORPTION ABSORPTION QUOTED RENT QUARTERLY CHANGE Q3 2009 YTD 2009 (US$ PSF) CHANGE IN IN RENT (SF) (SF) SEPT. 30, 2009 RENT (%) (%) (178,000) 3,000 123,000 6,000 (27,000) (24,000) (111,000) (200,000) (33,000) (81,000) 6,000 (111,000) (177,000) 251,000 (107,000) 5,000 (25,000) (73,000) 0 (9,000) (347,000) 51,000 666,000 148,000 (31,000) 10,000 (14,000) (381,000) (15,000) 22,000 128,000 (125,000) 7,000 130,000 (812,000) (3,378,000) (930,000) 12,000 (11,000) (17,000) 141,000 (3,688,000) (56,000) 107,000 (72,000) (46,000) 11,000 (208,000) 636,000 (36,000) (176,000) (342,000) 68,000 (86,000) (70,000) 48,000 (58,000) (9,476,000)
(73,000) 81,000 337,000 (106,000) (189,000) 103,000 (294,000) (1,476,000) (11,000) (109,000) (48,000) (100,000) (13,000) 413,000 (434,000) (22,000) 56,000 (180,000) 0 (142,000) 136,000 (80,000) 186,000 107,000 (142,000) 145,000 (78,000) (2,429,000) 22,000 (59,000) (11,000) (264,000) (386,000) (58,000) (2,305,000) (2,501,000) (1,665,000) (224,000) (175,000) (778,000) (79,000) (3,597,000) (44,000) 124,000 (174,000) (321,000) (8,000) 55,000 945,000 (695,000) (1,437,000) 690,000 343,000 (696,000) 948,000 (267,000) 144,000 (16,835,000)
22.20 24.00 26.40 18.30 27.20 25.50 19.50 27.70 21.10 21.60 18.00 19.30 25.30 21.00 23.10 26.10 25.80 28.00 18.60 20.90 27.30 19.50 20.00 21.00 34.70 18.30 27.60 35.40 17.60 21.70 32.90 21.00 28.20 21.90 26.10 28.10 30.20 27.00 25.60 30.70 23.20 24.60 26.30 24.50 19.50 22.00 21.60 25.40 35.20 34.80 37.00 27.40 25.00 24.70 29.70 30.10 31.10 26.90 (weighted) 25.20 (equal)
(1.16) 0.00 0.00 (0.22) (9.70) (3.77) (2.01) (0.36) 0.05 1.46 0.00 (0.82) (0.98) (4.55) (0.99) 2.92 0.00 0.11 0.00 (0.24) (1.01) 0.00 (4.76) (5.53) (2.25) 0.00 0.88 (1.99) 0.00 0.00 (0.60) 0.00 2.58 0.78 (1.17) (1.09) (5.12) 0.04 (19.62) (1.54) (1.86) (1.64) (2.09) 5.70 (17.45) (0.86) 0.00 (1.40) (3.30) 0.00 (3.45) (2.29) 0.00 (1.44) (0.07) (0.46) 0.23 (1.55) (1.78)
(4.24) 0.00 1.15 (3.64) (15.27) 21.43 (2.50) 15.46 3.12 2.23 1.47 (0.41) (2.88) (16.00) (3.03) 2.44 (4.44) (10.68) 0.00 (0.66) (2.04) 1.40 (4.76) (7.23) (5.63) 0.00 (3.36) (6.94) (9.40) 1.40 (5.16) (30.81) 1.00 (2.54) (3.83) (3.27) (3.91) (5.07) (19.87) (13.22) (3.86) (2.07) (11.31) 0.99 (20.57) (1.61) (5.26) 0.95 (8.15) (11.31) (10.98) 36.53 (3.85) 1.81 7.34 (1.21) (5.45) (4.07) (4.04)
COLLIERS INTERNATIONAL
5
CANADA
DOWNTOWN AND SUBURBAN OFFICE
ALL INVENTORY AND CLASS A
DOWNTOWN OFFICE – ALL INVENTORY
MARKET
EXISTING INVENTORY (SF) SEPT. 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montréal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto, ON Vancouver, BC CANADA TOTAL/AVERAGE
35,084,000 10,613,000 4,891,000 1,989,000 49,429,000 14,966,000 3,762,000 1,949,000 86,159,000 24,470,000 233,312,000
NEW SUPPLY Q3 2009 (SF)
UNDER CONSTRUCTION (SF)
VACANCY RATE (%) JUNE 30, 2009
874,000 0 0 203,000 0 360,000 29,000 23,000 1,381,000 (27,000) 2,842,000
4,595,000 578,000 0 0 0 520,000 0 103,000 3,190,000 0 8,986,000
VACANCY RATE (%) JUNE 30, 2009
VACANCY RATE (%) SEPT. 30, 2009
ABSORPTION Q3 2009 (SF)
ABSORPTION YTD 2009 (SF)
3.8 3.8 2.8 11.1 6.3 2.6 0.6 0.0 5.7 3.2 4.78
8.0 5.5 2.6 17.6 6.8 4.0 0.0 0.2 6.8 3.4 6.32
(299,000) (140,000) 16,000 20,000 (107,000) 233,000 6,000 (1,000) 14,000 (19,000) (277,000)
(653,000) (208,000) 11,000 20,000 (570,000) 151,000 2,000 3,000 257,000 (199,000) (1,186,000)
7.8 5.0 3.8 10.0 6.2 2.9 1.6 4.6 4.7 4.5 5.31
VACANCY RATE (%) SEPT. 30, 2009
10.7 6.1 3.9 16.5 6.6 3.8 1.3 4.2 5.0 4.5 6.14
ABSORPTION Q3 2009 (SF)
ABSORPTION YTD 2009 (SF)
(413,000) (121,000) 16,000 53,000 (238,000) 213,000 36,000 31,000 41,000 (4,000) (386,000)
(1,499,000) 254,000 (17,000) 57,000 (1,126,000) 130,000 50,000 34,000 452,000 (538,000) (2,203,000)
DOWNTOWN OFFICE – CLASS A
MARKET
EXISTING INVENTORY (SF) SEPT. 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montréal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto, ON Vancouver, BC CANADA TOTAL/AVERAGE
21,620,000 8,275,000 1,916,000 637,000 23,076,000 9,001,000 1,026,000 442,000 39,603,000 10,034,000 115,629,000
AVG. ANNUAL QUOTED RENT (C$ PSF) SEPT. 30, 2009
QUARTERLY CHANGE IN RENT (%)
45.50 (5.21) 46.60 (0.43) 31.50 0.00 26.50 (3.11) 30.70 (1.16) 47.50 (2.04) 34.80 0.00 30.00 0.00 52.70 (1.61) 45.50 3.41 44.80 (weighted) (1.46) 39.10 (equal) (1.08)
YTD CHANGE IN RENT (%)
(18.02) 2.33 2.88 11.43 (5.94) 5.30 (0.37) (8.71) 3.41 (4.78) (6.00)
SUBURBAN OFFICE – ALL INVENTORY
MARKET
EXISTING INVENTORY (SF) SEPT. 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montréal, QC Ottawa, ON Regina, SK Toronto, ON Vancouver, BC CANADA TOTAL/AVERAGE
17,239,000 8,285,000 6,011,000 2,393,000 22,590,000 19,896,000 533,000 96,313,000 28,139,000 201,400,000
NEW SUPPLY Q3 2009 (SF)
UNDER CONSTRUCTION (SF)
498,000 52,000 150,000 0 0 0 0 334,000 356,000 1,390,000
395,000 223,000 400,000 159,000 0 0 0 1,259,000 514,000 2,952,000
VACANCY RATE (%) JUNE 30, 2009
VACANCY RATE (%) SEPT. 30, 2009
ABSORPTION Q3 2009 (SF)
ABSORPTION YTD 2009 (SF)
12.7 8.2 19.7 8.7 8.1 11.6 1.4 6.9 11.1 8.99
12.4 9.9 19.0 9.2 7.7 11.9 0.2 7.3 12.4 9.39
460,000 (46,000) 152,000 (5,000) 209,000 (36,000) 6,000 116,000 108,000 964,000
870,000 (72,000) 256,000 102,000 349,000 (236,000) 22,000 857,000 (58,000) 2,090,000
VACANCY RATE (%) JUNE 30, 2009
11.0 10.3 14.7 9.0 9.1 9.7 1.4 6.7 8.1 8.21
VACANCY RATE (%) SEPT. 30, 2009
11.5 10.3 13.9 9.7 9.1 10.1 0.2 6.7 9.6 8.53
ABSORPTION Q3 2009 (SF)
ABSORPTION YTD 2009 (SF)
370,000 27,000 152,000 (16,000) 151,000 (70,000) 6,000 (237,000) (79,000) 304,000
410,000 48,000 297,000 112,000 431,000 (96,000) 22,000 (173,000) (353,000) 698,000
SUBURBAN OFFICE – CLASS A
MARKET
EXISTING INVENTORY (SF) SEPT. 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montréal, QC Ottawa, ON Regina, SK Toronto, ON Vancouver, BC CANADA TOTAL/AVERAGE
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COLLIERS INTERNATIONAL
8,058,000 4,308,000 2,571,000 1,078,000 12,195,000 11,645,000 533,000 44,717,000 13,009,000 98,117,000
AVG. ANNUAL QUOTED RENT (C$ PSF) SEPT. 30, 2009
QUARTERLY CHANGE IN RENT (%)
32.80 (5.76) 30.70 (1.79) 27.20 0.00 25.50 0.00 24.80 (0.40) 28.90 (3.76) 28.00 0.00 29.40 (1.34) 28.00 (9.68) 28.80 (weighted) (3.02) 28.40 (equal) (4.00)
YTD CHANGE IN RENT (%)
(12.67) (3.88) 2.91 (5.20) (10.20) (11.05) 0.00 (2.20) (9.68) (6.48) (6.99)
NORTH AMERICA
OFFICE INVESTMENT
Office Space Markets Continue to Falter
UNITED STATES OF AMERICA – OFFICE INVESTMENT
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cleveland, OH Columbus, OH Dallas/Ft. Worth, TX Denver, CO Fresno, CA Ft. Lauderdale/Broward County, FL Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New York - Fairfield County, CT New York - Westchester County, NY New York, NY - Downtown Manhattan New York, NY - Midtown Manhattan New York, NY - Midtown S. Manhattan Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco Peninsula, CA San Francisco, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa, FL Washington, DC Washington, DC - N.Virginia Washington, DC - Suburban, MD West Palm Beach/Palm Beach Co., FL USA AVERAGE
CBD SALES PRICE (US$ PSF) 189.00 – 200.00 151.00 282.27 235.00 225.00 161.00 115.00 36.89 – 195.00 175.00 – 250.00 135.00 0.00 110.00 245.00 – 88.00 – 292.00 339.00 225.00 175.00 98.00 – – 200.00 375.00 300.00 250.00 – – 85.00 69.07 294.00 – 150.00 135.00 225.00 – – 218.00 – 129.21 – 145.00 – 410.00 – 410.00 103.00 195.27
CBD SUBURBAN SUBURBAN CAP RATE SALES PRICE CAP RATE (%) (US$ PSF) (%) 8.50 – 8.50 7.60 8.50 8.50 8.50 7.50 10.00 – – 9.25 9.00 – 8.50 8.50 0.00 9.00 9.00 – 9.00 – 4.90 – 8.00 8.00 10.25 – – 8.00 7.00 8.00 8.00 – – 9.00 – 9.00 – 9.50 9.00 8.50 – – 6.50 – – – 9.00 – 7.50 – 7.40 9.40 8.14
96.00 250.00 175.00 151.00 73.43 140.00 120.00 112.00 115.00 – 75.00 125.00 197.50 102.00 250.00 76.00 0.00 130.00 120.00 159.32 110.00 189.00 262.00 221.50 180.00 175.00 135.00 200.00 150.00 – – – 200.00 244.00 150.00 135.00 135.00 220.10 177.29 110.00 180.00 200.00 134.68 – – 522.75 – 100.00 – 135.00 – 256.80 233.00 167.00 164.23
8.25 – 9.00 7.60 9.25 10.00 9.25 8.20 9.50 – 9.25 9.50 8.50 8.60 8.50 10.00 0.00 0.09 10.00 – 9.00 6.90 6.10 6.87 8.00 8.50 9.50 9.00 9.00 – – – 8.00 6.60 9.00 9.00 9.07 9.20 7.47 10.00 8.50 7.75 – 6.50 – – – 10.50 – 9.50 – 8.57 8.40 8.20 8.21
Continued from page 1
Rents continue to decline. For the fifth consecutive quarter, downtown lease rates dropped, with Q3 Class A asking rents dipping by 2.7% to $40.09 per square foot. Major markets such as Lower Manhattan, Boston, Chicago, Denver and Seattle contributed to the quarterly decline. Suburban asking rents also fell during the quarter, declining by 1.6% to $26.95 per square foot. Year-over-year CBD rents are down 18.8% while suburban rents are down 5.4%. Office rents in Canada also fell with CBD rents declining 1.5% during the quarter while suburban rents moved 3.0% lower. Office development pipeline continues to empty out. Construction activity continued to decline, with Q3 under construction activity falling by 14.2 MSF to total 51.0 MSF. Construction activity is expected maintain this trend, leaving the development pipeline below levels witnessed in early 2005, when just 40.0 MSF of office development was underway. Third quarter office completions totaled 16.8 MSF, a slight increase from the 16.3 MSF recorded in the second quarter, but a modest decline from the third quarter of 2008 when construction registered 20.3 MSF.
CANADA – OFFICE INVESTMENT CBD CBD SUBURBAN SUBURBAN SALES PRICE CAP RATE SALES PRICE CAP RATE MARKET (C$ PSF) (%) (C$ PSF) (%) Calgary, AB 400.00 7.50 300.00 8.00 Edmonton, AB – – 147.09 7.99 Halifax, NS – – 98.50 8.25 KitchenerWaterloo, ON 160.00 8.00 110.00 7.75 Montréal, QC 275.00 7.50 175.00 8.25 Ottawa, ON – 8.00 130.00 8.38 Regina, SK 139.00 7.70 – – Saskatoon, SK 175.00 8.50 – – Toronto, ON 229.00 7.50 220.00 8.50 Vancouver, BC 425.00 5.75 300.00 7.50 CANADA AVERAGE 257.57 7.56 185.07 8.08
GLOSSARY Inventory – Includes all existing multi- or single-tenant leased and owneroccupied office properties greater than or equal to 10,000 square feet (net rentable area). In some larger markets this minimum size threshold may vary up to 50,000 square feet. Does not include medical or government buildings. Vacancy Rate – Percentage of total inventory physically vacant as at the survey date including direct vacant and sublease space. Absorption –Net change in physically occupied space over a given period of time. New Supply – Includes completed speculative and build-to-suit construction. New supply quoted on a net basis after any demolitions or conversions. Annual Quoted Rent – Includes all costs associated with occupying a full floor in the mid-rise portion of a Class A building inclusive of taxes, insurance, maintenance, janitorial and utilities (electricity surcharges added where applicable). All office rents in this report are quoted on an annual, gross per square foot basis. Rent calculations do not include sublease space. Cap Rate – (Or going-in cap rate) Capitalization rates in this survey are based on multi-tenant institutional grade buildings fully leased at market rents. Cap rates are calculated by dividing net operating income (NOI) by purchase price. Note: SF = Square Feet; PSF = Per Square Foot; CBD = Central Business District
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
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HIGHLIGHTS · NORTH AMERICA
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OFFICE · THIRD QUARTER 2009
$1.6 Billion (€1.1 Billion) in Global Revenue 1. 1 Billion SF (102 Million SM) Under Management 12,700 Employees
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