The recently released report, published by Marcus & Millichap Real Estate Investment Brokerage Co., says that the excess space will push the vacancy rate up and pull rents down. The average vacancy rate is expected to increase to 19% over the next 12 months, according to Marcus & Millichap researchers. Meanwhile, the average rent is expected to decline by 5% during 2002 "as landlords come under pressure from the large amounts of space available in the marketplace."
In addition, the average selling price for office product here is expected to decrease 4%, dropping to $132 per sf by the end of 2002. "Shrewd investors are taking a long-term view and will continue to be attracted by the high cap rates for office properties when compared to other property types," the Marcus & Millichap report says.
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