Office rental rates are expected to slip, as the vacancy level continues to rise, says a recently published report by Delta Associates, the research affiliate of Chicago-based Transwestern Commercial Services. As the tenant base shrinks, rental rates will continue to drift downward until the latter half of the year. "Rents will likely stabilize by year-end 2002, as the market begins its anticipated recovery," the report points out.
Meanwhile, the vacancy rate is expected to increase above the current level of 14.4% in the near term. Occupancy is not predicted to pick up until the national economy begins to strengthen, which is expected to occur in the latter half of 2002. "We project Orange County's vacancy rate, including sublet space, to drift down below 14% in two years," say Delta's researchers.
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