Not surprisingly, Oncor International's Mid-Year 2001 North American Office Market Report shows tech centers suffering the greatest tenant losses. Technology, telecommunications and Internet ventures, predictably, left the deepest dents in office-occupancy rates.
And tenant flight has been much faster than analysts expected. Survey data from year-end 2000 were nothing short of glowing. Occupancy was high, tenants were optimistic about expansions and brokers were popping corks between lease signings.
What a difference six months can make.
Dot-com capital San Francisco's CBD saw vacancies jump from 5.14% at the end of 2000 to 9.82% at mid-year.
In Seattle, another cyber-mecca, a lot of programmers apparently went out for coffee and never came back. According to the survey, the December CBD office-vacancy rate in Seattle was a negligible 1.94%. At mid-year, 4.95% of Seattle office space was available. And its geographic counterpart, Boston, also took a hit, with CBD office vacancies up from 2% to 7.10% over the six-month period.
Chicago, which never really embraced the techno-craze, nevertheless has a few more empty offices than it did last year. December 2000 vacancies in Chicago's CBD were at 10.30%. Oncor's mid-year figures showed empty office space in the Windy City was up to 12.48%.
Orlando remained virtually flat, with vacancies inching from 10% in December to 10.45% in June.
Despite the massive exodus from Silicon Alley lofts, New York escaped the national doldrums relatively unscathed. Big Apple office vacancies creeped up from 5.10% in December to 6.30% in June. Los Angeles saw a similar rise in available space. According to Oncor, Angeleno office-building owners saw a small rise in vacancies, from 16.64% at year-end to 18.36% on the Q2 survey.
The overall trend among the 46 markets reflected in the survey is a relatively modest rise in vacant office space, from 10.16% at year-end to 10.65% most recently. But Oncor isn't betting the farm on a quick turnaround of the situation. The vast majority of its forecasters, 93%, see no improvement in Downtown occupancy levels this year. Hunches are more optimistic for next year, with 65% of survey participants predicting an upturn in 2002.
An organization of privately owned commercial real estate companies, Oncor International comprises more than 50 companies in over 200 markets worldwide.
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