Studley report: tenant effective rents declined in 2002.An exclusive report released by national commercial real estate services firm Julien J. Studley Inc. indicates that tenant effective rents continued to decline sharply in most major markets in 2002. The Studley Effective Rental Index (SERI SERI Sustainable Europe Research Institute SERI Special Education Resources on the Internet SERI Solar Energy Research Institute (Golden, Colorado) SERI Singapore Eye Research Institute SERI Schepens Eye Research Institute ) 2003 report also showed availability of top-end office space in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. has gone from near-record tightness two years ago to relative softness today. In all but two of the 15 major metropolitan regions tracked by Julien J. Studley, Class A office rents fell, compared with four in the previous year. San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden , which experienced a 31.3% decrease in tenant effective rates in 2001, saw an even larger drop in 2002, falling 45.8%. Other cities which experienced declines greater than 10% included Atlanta, Boston, Houston, West Los Angeles
n. A central portion of a city, between uptown and downtown. midtown Noun US & Canad the centre of a town Manhattan. Landlord effective rates, which deduct operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and real estate taxes, fell by an even larger percentage. "The continuing series of shocks endured by the economy in 2002 created an atmosphere of risk-aversion among corporate decision makers," said Studley Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Mitchell Steir. "Burgeoning recovery was slowed by businesses questioning major capital investments and expansions. However, optimism may grow if the anticipated economic recovery occurs in 2003." Sublease sublease n. the lease of all or a portion of premises by a tenant who has leased the premises from the owner. A sublease may be prohibited by the original lease, or require written permission from the owner. alternatives comprised an increasingly significant portion of available space in 2002, the report said, with much of it converting to direct lease space in the next several years. Shadow space -- sublease space that could be available under the right terms but is not formally on the market -- is also being reported in large quantities, the report found. While it is difficult to gauge the impact of shadow space, its presence further increased tenants' leverage in lease negotiations, putting additional downward pressure on effective rents. The findings are all part of the SERI, an annual report that uses numbers that reflect actual negotiated lease terms for Class A properties, as opposed to more general market statistics that often use asking rents based on broker listings. The tenant effective rents section details the rents that tenants actually paid after the deduction of landlord concessions such as free rent and tenant improvement allowances. Landlord effective rents more accurately depict the true net income received after further deducting operating expenses and real estate taxes. |
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