Yet another data point for why the administration is doing all it can to slow-down the commercial real estate collapse:
San Francisco office rents have dropped 24% year over year, the biggest decline since the dot-com crash. Average rents fell to $38.80 sq/foot from $50.92 for Class A properties according to Colliers. Most notably: the vacancy rate increase
despite the rent decline and has reached 13.2% from 12.6% in the previous quarter, and 10.2% from a year ago.
These numbers are actually good compared to the data out of
Cushman and Wakefield presented yesterday indicating that first quarter Manhattan office rents
fell the most in 25 years.
But back to San Fran: for all those who claims the bottom is here keep this in mind:
- Half the largest companies in the San Fran bay area plan to cut staff in the next six months
- 279,000 people in the region are looking for work, double from last year
- Vacancies will increase in Q2 as Schwab and Macy's shed 375k and 153k in space, which will add to the 814,681 sq. feet of Class A vacant sublease space.
The bottom line according to Colliers: Commercial property purchases in San Fran are "
nearly non-existent" due to surging defaults and the reduced availability of debt. The ball is now in the bulls court to spin this information as anything but disastrous for anything even remotely connected to commercial real estate.
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1 comments:
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The brilliant and beautiful Meredith Whitney's predictions would tell me to expect another 25% drop in rental rates.
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