His firm’s latest Market Review indicates that rents for Class A office space have fallen, with asking rental rates averaging $22.81 per square foot. This is down from $23.52/SF in the previous quarter.
Class B office rents in this area are up at $18.13/SF, after being at $17.86/SF for the quarter prior.
CresaPartners also reports that the Raleigh-Durham office market continued to plod along during the fourth quarter despite the national economic doldrums. The overall vacancy rate for Class A and B buildings now stands at 12.8%, up from 12.6% in the third quarter. Net absorption of office space in the market was 555,000SF, a surprisingly strong number considering absorption is historically lower in the fourth quarter.
Activity slows
Good opportunities are available to tenants now and this is expected to continue through at least the first half of 2009. Vacancy rates are expected to increase moderately as demand stays soft. The level of sublease space on the market is increasing, putting additional pressure on landlords. Until economic indicators reverse, landlords will be offering additional concessions to attract and retain tenants. New construction projects have stalled.
Tenants Encouraged To Be Proactive
In today’s market, it is increasingly important for tenants to consult closely with their real estate advisor to develop a solid strategy and to take full advantage of the market dynamics.
CresaPartners Top 3 Largest Transactions in the Raleigh-Durham Q4
Wake County Public Schools – 106 acres
CDM – 16,070SF office lease
BBH Media – 40,000SF office lease
