ating costs, the pullback from the market by housing-related space users will
give tenants the upper hand, says Jeff
Sweeney, managing principal of Grubb
& Ellis Commercial Florida. “Expect
tenants to look for more flexible terms,
rent abatement and other concessions,”
he says. Going forward, Sweeney sees
demand coming from the biomedical,
technology, defense and service sectors.
“Speculative building will slow dramatically,” he adds, “but a number of
build-to-suit projects are on the horizon
in the suburban markets as large users
need fresh blocks of unencumbered
space.” Indeed, CBRE relates that
INTRODUCING
SAVE THE DATE
May 6th, 2008
Holiday Inn on King
How do the U.S. and Canadian markets impact one
another and how can you capitalize? Find out during
these innovative panel sessions.
HOT TOPICS...BE INFORMED...
Toronto Town Hall Meeting: What’s in Store for 2008
South of the Border: How What is Happening in the U.S.
Market Will Soon Impact Canada
Where is North America’s 4th Largest Industrial Market
Headed?
Cross Border Structure & Perspectives
The Outlook for Leasing, Investment & Development in the
Toronto Office Market
Getting Deals Done in Today’s Debt & Equity Capital
Markets: Edge of The Storm? How Is North the American
Capital Crunch Affecting Toronto
Can-Am Retail: Will Dour North American Consumer Outlook
Sour Toronto Retail?
Burbs & Beyond
about 65% of the 1. 4 million sf of space
under construction at year’s end was
preleased.
New development of industrial space
sent that sector’s vacancy from 5.7% in
Q3 2007 to 7.3% in Q4. Still, that’s only
a 20-basis-point decline over year-end
2006’s figure, says CBRE. After three
quarters of positive take-up, absorption
was in the red by 941,811 sf in Q4,
mainly due to speculative projects coming on line. In fact, the firm says new
industrial space delivered during the
last three months of the year was 60%
vacant.
Thankfully, 82% of the 2. 7 million sf
currently under way has been committed to, according to CBRE. And rents
went up over the year to $6.91 per sf,
triple net, though much of the appreciation was due to the increased costs of
construction, entitlement, labor,
energy, insurance and taxes.
Sweeney expects activity in the
industrial segment to remain flat “as
tenants stay in their current space due
to the scarcity of less-expensive second-generation space.”
Despite the slowdown, industry
observers see sales activity continuing
for all property types, albeit not at the
same rate as in the past. According to
Sweeney, the players in most of the
deals will be institutions, which not only
have to funnel capital into new investments but are also seeking to restructure
their portfolios by selling off select
properties.—Sule Aygoren Carranza
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THE CITY’S COMMERCIAL REAL ESTATE
market is cooling, with a general rise in
vacancy rates across all property types
by year-end, say the experts.
“Tampa Bay’s commercial market
has been given a reality check with the
national economy’s downward spiral.
All sectors are experiencing oversupply
and undergoing a correction as the
mortgage and credit crisis has taken its
