Printer Friendly

Why build when offices remain empty.

A fundamental principle of economics is the law of supply and demand. When applied office building construction, the supply of unoccupied existing office space far outstrips the demand for new structures in many U.S. cities.

In the case of 10 major U.S. cities, all with office vacancy rates hovering above 13 percent, there was no new office building construction in 1991, according to the biannual survey by Oncor International, an international real estate company. Two other cities -- Dallas and Houston -- which ranked highest in Oncor's study of 55 U.S. and foreign cities, with vacancy rates of 26 and 28 percent respectively, recorded limited construction activity late in the year.

Office construction has eclipsed demand in many metropolitan areas. Crains Chicago Business recent issue quotes Chicago real estate experts as saying the nation's third largest city may not see new office construction until the end of the decade.

Around the country, this dearth of new construction is expected to continue. F.W. Dodge is projecting office construction will drop from 100 million to 95 million square feet in 1992. The report says since 1985, newly started construction has been reduced by more than 50 percent "yet the glut of empty spaces continues to haunt the construction market....Until this huge inventory of available space is assimilated, it is premature to consider the recovery of commercial building."
 Vacancy Rate
Stamford, CT 26%
New Orleans, LA 25%
Phoenix, AZ 25%
Denver, CO 23%
Fort Worth, TX 22%
Hartford, CT 21%
St. Louis, MO 21%
St. Paul, MN 20%
Nashville, TN 18%
San Francisco, CA 13%
Source: ONCOR International
According to ONCOR's study none of
these cities recorded any office
construction in 1991.
COPYRIGHT 1992 Vance Publishing Corp.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:vacancy and occupancy statistics for office buildings
Author:Adams, Larry
Publication:Wood & Wood Products
Date:Mar 1, 1992
Previous Article:1992 cabinet projection highest in 13 years.
Next Article:What's ahead, fellows?

Related Articles
Tight office market predicted in New Jersey.
Strong impetus for Class B investments.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters