Commercial market rebound will have to wait, Cresa contends
You know it’s bad when we are just a month into 2010 and some of our local commercial real estate experts are already writing the year off.
Actually, let me clarify that, not one year, but two years.
Boston-based CresaPartners, which advises corporate clients on navigating the office, contends we won’t see a rebound in the commercial market now until 2012, when rents will finally start rising again.
Right now, though, rents are plunging as the nation struggles to climb out of the Great Recession.
Rents in Boston’s top towers fell more than 5 percent at year end, to $46 a square foot, marking the fourth straight quarter of declines.
Some of the upcoming market lowlights Cresa is telling clients to look out for over the next two years include:
· A spike in foreclosures of office towers that will push down rents another 10 percent.
· A rising office vacancy rate, now at 17 percent and moving upward.
· A rise in the amount of office space downtown Boston firms are putting directly on the market, with the total inventory of sublease space expected to soar past 2 million square feet this quarter.