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CB Commercial: market poised for 'uptick'.

Class A buildings with stable ownership will be the beneficiaries of an impending market upturn according to an analysis of the New York City commercial real estate market by CB Commercial.

"Net effective rental rates on new leases produce little or no positive cash flow for landlord in most instances," said Steven A. Swerdlow, executive vice president and managing officer of CB Commercial in New York City. "To us, this suggests rents and property values have fallen about as far as they are going to in the current downcycle and the market is poised for an uptick."

During the impending recovery, the gulf will widen between Class A and Class B/C properties, according to CB Commercial. The trend is already in evidence. The average vacancy rate in properties built between 1975 and 1988 -- which are overwhelmingly class A properties -- is 11 percent. By comparison, buildings constructed before 1975, predominantly class B/C space, have an average vacancy rate of 15 percent.

"The exception with class A properties are those buildings built in 1989 and 1990 that have significantly higher vacancy rates, primarily due to ownership problems," said Swerdlow. "Prospective tenants are well advised to check the financial strength of ownership before entering into a lease agreement.

For copies of the CB Commercial/New York City Report, please contact: Steven Swerdlow, CB Commercial, 437 Madison Avenue, New York, New York 10022 (212)223-7171.
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Title Annotation:CB Commercial Group Inc. announces forecast for commercial real estate market in New York, New York
Publication:Real Estate Weekly
Date:Oct 7, 1992
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