Global Office Rates Bottoming Out

NEW YORK CITY-Global office rents are bouncing along the bottom, as markets start to regain their footing, according to CB Richard Ellis Group Inc. In its semi-annual Global Office Rents survey, the firm logged a collective 4.6% decline in worldwide office rents over the 12-month period ending March 31. A number of larger markets recorded a marginally higher decrease of 6.4%.

Of the 176 cities CBRE tracked, 133 saw occupancy costs dip. Roughly 33 markets registered double-digit percentage point declines, while 53 markets—smaller ones impacted by shifts in key market assets—witnessed annual increases, according to the survey.

So how does this reflect on the much-touted global recovery? If rates are still dwindling in a number of major markets, what does that say about the rebound? “Commercial real estate lags the economy,” CBRE’s chief global economist, Raymond Torto, reminded participants on this morning’s conference call announcing the survey results. “A lot of the decline we tracked occurred in the first couple of months of 2009,” but the rates will likely continue to bottom out this year, he noted.