the market are seizing the opportunity to grow. One of the largest
leases inked so far this year was
AIG’s sublease of 800,000 sf from
Goldman Sachs at 180 Maiden
Ln. According to GlobeSt.com, the
tenant will be consolidating several locations into the space in
phases through 2011.
Fallout from the subprime
debacle continues to claim jobs in
sectors serving the housing industry. The Inland Empire in
Southern California, for example,
has seen an exodus of housing-related office tenants, sending its
Q2 vacancy rate skyrocketing to
17.5%, an increase of 820 basis
points over the past four quarters, according
to Grubb & Ellis.
The pace of leasing has dropped off in
most markets and property sectors. On a
national basis, year-to-date office leasing
activity stood at 109.3 million sf in June,
down from 114.5 million sf a year earlier,
reports Cushman & Wakefield.
“If you look at the existing stock of leases
around the Americas, a certain percentage
of those come to term everyday,” says
Christopher Ludeman, president of
Americas brokerage for CB Richard Ellis in
Los Angeles. “So all kinds of companies are
continuing to lease space, but every sector is
moderate and some are pensive.”
Cushman & Wakefield’s Maria Sicola is
inclined to agree. “Leasing is pretty much
down across all sectors year over year,”
says the San Francisco-based executive
managing director and head of research.
“But the leasing that is taking place is com-
ing from two sources: companies
whose renewals are eminent and
companies who are in industries
that are growing.”
Firms that fit the bill, says
Sicola, tend to be in the oil-related
industries. These companies have
become increasingly active, she
says. Some 59 contracts, totaling
2. 1 million sf of office space
throughout the US, were signed
by engineering and management
services in the previous quarter.
Insurance companies, business
services firms and some financial
services providers are also continuing to absorb office space, Sicola
says. Technology and law firms
are also active, adds Ludeman.
Nevertheless, the overall office market is
soft, which is placing tenants in a favorable
position. Landlords needing to keep full rosters to stay competitive are going to have to
raise their concession offers, say experts.
Sicola, meanwhile, is noticing larger tenants
with space requirements over 100,000 sf
leveraging their size in softer markets.
“The pendulum is swinging back to equilibrium between tenants and landlords,”
Cash buyers are becoming more prevalent in today’s market. In an all-cash
transaction, Wells Real Estate Fund acquired AT&T’s Lindbergh Center, a
955,000-sf office building in Atlanta, in a sale-leaseback that closed in July.
Commercial Real Estate
$124,000,000
Syndicated Construction Loan
(Administrative Agent)
1999 K Street
Class A Office
Washington, DC
$13,500,000
Bridge Financing
Diversified Realty
Ventures, LLC
The Atrium Medical Offices
Chattanooga, Tennessee
$355,000,000
Syndicated Unsecured Credit Facility
(Administrative Agent)
Realty Income
Net Leased Property REI T
Retail Properties in 49 States
$26,259,000
Freddie Mac
Mid-City
Financial Portfolio
5 Affordable Housing Properties
Locations in SC, NC, VA
$71,000,000
Term Loan
FedEx Terminal
182,833 sq ft Truck Terminal
San Bernardino, California
$54,600,000
Construction Financing
Twinbrook Station
Mixed Use, Multifamily, Retail
Rockville, Maryland
$14,200,000
Construction Financing
Westpointe
Corporate Center
114,000 sq ft Office/Flex
San Antonio, Texas
$9,800,000
Refinance
45 Research Way
Class A Office
East Setauket, New York
