SIGNS OF RECOVERY IN THE OFFICE MARKET
The economic recovery is finally making a dent in some office vacancy rates. For instance, in San Jose — where vacancies topped 20% in the third quarter of 2003 — the office vacancy rate declined by 2.3% to 19.3%.
| Metro | 4Q 2003* | 3Q 2003* | 3Q % Change* |
|---|---|---|---|
| Long Island | 11.6% | 14% | -2.4% |
| San Jose | 19.3% | 21.6% | -2.3% |
| Westchester/Mid-Hudson, N.Y. | 11% | 13.1% | -2.1% |
| Stamford, Conn. | 14.6% | 16% | -1.4% |
| Boston | 19.7% | 21% | -1.3% |
| *Percentage point change | |||
| Source: CB Richard Ellis | |||
SITE SELECTION FACTORS CORPORATE USERS VALUE MOST
Building location is most important when considering corporate relocation or expansion, according to a survey of corporate users of commercial real estate conducted by NREI and Coldwell Banker Commercial this winter. Employment costs, tax incentives, a skilled labor force and transportation issues were also cited as important by at least one-third of respondents.
INDUSTRIAL STRENGTH: WHO'S HOT AND WHO'S NOT
At 22.9% vacancy, Jacksonville, Fla., holds the dubious distinction of having the highest industrial vacancy rate in the nation. Meanwhile, the New York industrial market is steaming: both Westchester and Long Island are at a mere 6.1% vacancy rate.
| Westchester Mid-Hudson, N.Y. | 6.1% | Jacksonville, Fla. | 22.9% |
| Long Island | 6.1% | Austin, Texas | 22.8% |
| Mid-New Jersey | 7.1% | Pittsburgh | 21.4% |
| Northern New Jersey | 7.8% | Boston | 19.7% |
| St. Louis | 8.5% | Las Vegas | 18.2% |
| Source: CB Richard Ellis | |||
SINGLE-TENANT RETAIL SHOWS STRENGTH
Low interest rates have encouraged investor interest in real estate, and single-tenant retail provides a safe, low-maintenance investment. In addition, 1031 Exchange buyers are nearing the end of a traditional eight-year ownership cycle, according to Marcus & Millichap. This process depresses cap rates as more investors get involved — a trend that is expected to continue for at least the next six months, the firm predicts.
FLYING SOLO
In the U.S., the number of single-person households is on the rise. By 2010, 28% of U.S. households will consist of one person. And according to Bureau of Labor data, more than 40% of one-person households will rent their residences.