Meanwhile, she gives the Central Business District a green and the Southeast Suburban and Northwest markets a red.
''The Southeast Suburban market has experienced three dynamics in the last year: the tech fallout, tenants consolidating into campus environments leaving relet space behind, and overbuilding, putting (the) vacancy at 23.4%,'' Barrett says. ''Some of the tenants who consolidated to campus environments include Oncor, Invesco, Lucent and CH2MHill, leaving behind relet class B space. In addition, there were nine new projects build last year with over 60% still unencumbered.''
The market ended 2001 with negative absorption of 2.1 million sf.
''For a market that typically absorbs 2 million sf with build-to-suits, we expect one good year to get back on our feet and three more to reach equilibrium,'' of a 10% vacancy rate, she adds.
The Northwest market, she reports, has a 35.2% vacancy rate.
''The events in this market were driven by the venture-backed tenants, tenants who over-committed and did not deliver on their business plans,'' she says. ''Examples are Level 3, XO Communications, 360Networks, and Global Commerce."
The CBD has an overall office vacancy rate of 11.8%, compared with 5% at the end of 2000.
However, ''if nothing unexpected happens in the economy, or surprises for some of the larger telecommunications or banking anchor tenants Downtown,'' the CBD should reach equilibrium of a 10% vacancy rate in less than a year, Barrett says.
Barrett also offered this advice for professionals involved in commercial real estate:
* Sellers could look toward opportunity funds seeking good real estate at good prices and risk.
* Landlords need to keep existing tenants happy by taking care of any incremental growth needs, maintaining the best rental rates and extending leases short term.
* Landlords need to preserve present value and should focus on retaining tenants.
* Brokers need to talk to clients about renewals, consolidations and balancing portfolios. Strategy is important to understand, so they can advise clients on how to preserve and take advantage of the market.
* Tenants need to restructure value. It's time to balance and realign portfolios. Tenants should try to keep key properties in Downtown, when they also have offices in the suburbs.
* If you originally projected to sell a property in six to 12 months, expect that it will now take 18 to 24 months.
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