The statistics are slow to reflect this momentum as tenants proceed with caution before closing a deal. Lead times have nearly doubled in office leasing, where brokers report some transactions taking six to nine months to solidify.
Although most asking rental rates remain unchanged, effective rents have decreased because of concessions offered to tenants who have become wise to current market conditions, Colliers says.
Rental abatements are being offered in the industrial markets, and landlords of office buildings are relaxing credit requirements while offering generous free rent and tenant improvement packages.
Suburban class A office space continues to lease as evidenced by the 247,347 sf of positive absorption that occurred during the first quarter, which decreased the vacancy rate one percentage point to 11.73%, the company reports. Suburban class B space continued its downward trend in the first quarter with negative absorption of 501,665 sf; causing a nearly two-point increase in the vacancy rate to 13.7%.
While warehouse/manufacturing vacancy remains relatively unchanged at 11.19%, vacancy in high-tech space has decreased nearly two points since year-end 2001 and now stands at 17.08%, according to Colliers officials. Availabilities in sublease space remain abundant due to attractive deals that can be made for unencumbered space, the report notes.
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