Six months ago, office rents were at an all-time high and vacancies were near an all-time low, he says. Now, it's a renter's market for the first time in six or seven years, he says.
The culprit? Four million sf of subleased space on the market, much of it along the Northwest corridor between Denver and Boulder and in the Southeast market.
But it's not fair to compare the current market to the depressed times of the mid-1980s, Beer says, even though the Northwest submarket's vacancy rate will rise to more than 20%, which isn't that far off from the worst days of the '80s.
But now, instead of empty space, most of it is subleased space and owners are still collecting rent, he says.
Also, the small Northwest market could quickly turn around if only one or two major companies from Northern California, tired of brownouts and blackouts, moves to the corridor, he says.
"It could change quickly," he says.
Just like the Colorado weather.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
