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Tuesday, April 16, 2013

2013 First Quarter Office Rental Vacancy Rates

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After the first quarter of the year, many are wondering how the office rental market has been behaving in their cities.

Back in 2011, the national vacancy rate was almost at 13%, but according to Costar Group the first quarter of 2013 has given us the good news that it continues a decreasing tendency, reaching 11.8%.

Although vacancy is decreasing, some cities assume the change at a different pace, below are the cities with the highest vacancy rate:
Vacancy rate
Rental rates
San Diego
Los Angeles
Washington, D.C.
U.S. total
                                                   Source: Costar Group

Due to the importance, the location and the industries that are established in the city, it’s surprising to see Los Angeles with lower rental rates than other cities, yet spaces are not filling up as fast. 

Washington, DC continues a slow recuperation from last year, but its high prices show the importance of the market and analysts expect a downturn in vacancy by the last quarter of the year, for now it’s nothing but speculation.

Phoenix still shows a large amount of empty spaces, and even when low prices are being offered, the market is not being as dynamic as the rest of the country. But this becomes an opportunity for those looking a city to start a company, with plenty of availability and low prices Phoenix can be very attractive to sign a long term lease and save some money.

But there are also cities that standing out and showing a decrease in vacancy rates:
Vacancy rate
Rental rates
New York City
San Francisco
U.S. total
                                                     Source: Costar Group

New York confirms why it’s called the “business capital of the world”, with one of the lowest vacancies, in spite of having the highest rates in the country. Attractive tax policies, benefits and an entrepreneurial culture are helping the city to consolidate as the epicenter of business.

Boston is second, with prices that are not as high as other major cities. A good alternative for young entrepreneurs, who are just finishing university and are looking to start a company. If available spaces continue decreasing, prices will go up and an opportunity will be lost.

San Francisco is not so far. High rental rates and relatively average vacancy rate rank the West Coast financial center as the 3rd most positive real estate market.

If you are looking to rent an office in any of these cities, make sure to check the vacancy rates among the different neighborhoods in your city. That may give you a hint of where you will find better prices. Or simply call OfficeList and we’ll give you all the information you need to find your dream office.

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