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C&W: vacancy rates stabilize nationally.

C&W: Vacancy rates stabilize nationally

Despite almost 5 million square feet of new construction added the vacancy rate in the nation's central business districts (CBDs) remained relatively stable during the third quarter at 18.5 percent, according to Cushman & Wakefield, Inc.

"Although it will take some time for the entire country to recover because of weak demand, conditions seem to be stabilizing," said Arthur J. Mirante II, president and chief executive officer of Cushman & Wakefield, Inc. "Overall, I believe effective rental rates have bottomed. In most major markets, effective rents are below what they were in 1986, by 10 to 20 percent."

Three cities had significant amounts of new construction, causing their vacancy rates to rise: Los Angeles, (1.2 million square feet), Chicago (522,000 square feet) and Boston (450,000 square feet). Los Angeles' vacancy rate went from 22.6 percent to 24.0 percent, Chicago's from 17.6 percent to 18.7 percent, and Boston's from 17.3 percent to 18.3 percent.

Conversely, Washington, D.C. added nearly 1 million square feet of new construction, and, because of significant leasing activity by the federal government and law firms, its vacancy rate decreased, from 13.1 percent to 12.3 percent.

The Pacific Northwest continues to be a strong market. Bellevue, Washington, buoyed by Microsoft's expansions, has the lowest vacancy rate in the nation (10.9 percent), while Seattle (14.1 percent) and Portland (16.1 percent) have low vacancies as well.

At the same time, price is also an important consideration in this region. Portland ($19.28), Bellevue ($19.86) and Seattle ($21.15) have three of the lowest asking per square foot rental rates in the nation.

Suburbs (Non-CBDs)

In the suburbs, vacancy rates remained stable despite 6.3 million square feet of new construction. The suburban vacancy rate declined from 21.5 percent in the second quarter to 21.4 percent in the third quarter.

"The suburbs have remained stable this year, and demand has been improving in cenain areas, such as Texas and Florida," Mirante said.

Denver, which has been declining steadily due to visually no new construction for several years and improved demand from state government and various industries, decreased from 22.1 percent to 21.4 percent.
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Title Annotation:Cushman & Wakefield, central business district vacancy rates
Publication:Real Estate Weekly
Article Type:Brief Article
Date:Nov 13, 1991
Words:377
Previous Article:Robert F. Kiely.
Next Article:Commercial regs begin this Friday.
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