colliers north american office highlights 3q 2010

8/8/2019 Colliers North American Office Highlights 3Q 2010

1/8

HIGHLIGHTSNORTH AMERICA

.COllIERs.COM

Q3 2010 | Office

ROss J. MOORE Chie Economist | USA

Without raising expectations to unrealistic levels, this quarters results suggest the ofce market has indeed hitbottom and has begun what will almost certainly be a very long and slow road to recovery. Although theeconomy continues to languish and job growth remains disappointing, third quarter occupancies improved othe second three month period and the national vacancy rate posted a slight decline. Canadian markets alsoregistered modest growth, helping to round a good quarter or North American ofce markets. With both theU.S. and Canadian economies posting reasonable growth and the addition o more private sector jobs, leasingmarkets are expected to continue improving, albeit only in small increments with no sudden surgeanticipated.

Third quarter data reafrms our view that the U.S. ofce market has entered the rst phase o what will likelybe a multi-stage recovery. Most encouraging is the nine-month-long gain in private sector employment.

Furthermore, ofce-using employment was reasonably strong during the July-September period, suggestingofce leasing activity is unlikely to ade. The uncertainty surrounding the midterm elections and the possibleextension o the Bush administration tax cuts may dampen ofce leasing demand or the ourth quarter, butthat should only be a temporary phenomenon. Widespread increases in rents are unlikely anytime soon, butoccupiers in select markets would be wise to lock in todays lease rates be ore lower availabilities give land-lords the upper hand.

U.s. ofce vacancy rate down margina y. The U.S. national ofce vacancy rate moved slightly lower duringthe third quarter, moving two basis points lower (100 basis points equals one percent). This represented the

Two quarters o positi

absorption shows theU.S. ofce market isnow stabilizing a ter atwo year period opersistent weakness.

MARkET IN ICATORsRelative to prior period

U.s. O ICE MARkETsUMMAR sTATIsTICs, Q3 2010

O ce Markets Show First Signs ofBeginning a Long Slow Road to Recovery

Q32010

Q42010*

VACANC

NET ABsORPTION

CONsTRUCTION

RENTAl RATE

*Projected

U.s. O ICE MARkET Q3 2009 Q3 2010

M i l l i o n

S q u a r e

F e e

t

V a c a n c y

( %

)

-20

-10

0

10

20

Q3 2010Q2 2010Q1 2010Q4 2009Q3 2009

Absorption Completions Vacancy

13

14

15

16

17%

Vacancy Rate: 16.28%Change rom Q2 2010: 0.02

Absorption:6.6 Million Square Feet

New Construction:5.4 Million Square Feet

Under Construction:20.6 Million Square Feet

Asking Rents Per Square Foot(Change rom Q2 2010):

Downtown Class A: $39.06 (1.4%) Suburban Class A: $26.22 (0.1%)

continued on pag


2/8P. 2 | COllIERs INTERNATIONAl

highlights | Q3 2010 | ff c | th Am cA

UNITE sTATEs | O NTO N O ICE | All INVENTOR

MARkET

EXIsTINGINVENTOR (s )

sEP. 30, 2010

NE sUPPlQ3 2010

(s )

NE sUPPlT 2010

(s )

UN ERCONsTRUCTION

(s )

VACANCRATE (%)

JUNE 30, 2010

VACANCRATE (%)

sEP. 30, 2010

ABsORPTIONQ3 2010

(s )

ABsORPTIOT 2010

(s )

Atlanta, GA 56,9 , 53, 5.5 5. , Bakers eld, CA ,966, 6.9 8.8 ( , ) (

Baltimore, MD , , 8, 6.6 6.8 (3 , ) (9Boise, ID 3,4 , .6 . (3, ) 4Boston, MA 59, 9 , 6 , 6 , 6 4, 5.5 6.3 , (Charleston, SC , 5 , 6 , 6 , 8.5 . ( , )Charlotte, NC ,5 4, , 5 , 5.3 3.6 3 8, 4Chicago, IL 3 ,589, 6 9, . . , (8Cincinnati, OH ,9 , 8 5, 8.3 .8 5 , (5Cleveland 34,5 4, 6.8 8.5 3 , 86Columbia, SC 4,586, 9 , . 5. 8 , Columbus, OH 3,3 8, 5.3 5.6 (3 , ) 39Dallas/Fort Worth, TX 36,666, 6. 5.5 4, (389Denver, CO 5, 4, 4.9 4.4 346, (3Detroit, MI 3 , 48, . . 68, (499Fresno, CA 3, 63, 5 , 58, 9.4 .9 (5, ) (Ft. Lauderdale/Broward Co., FL 9, 4, 3, 4. 3.4 6 , (33Greenville, SC 3, 8 , 53, 8. 8.5 ( , ) (5Hart ord, CT 9, , 8 , .9 .5 (4 , ) ( 4Honolulu, HI 8, 4, .8 . (85,Houston, TX 36,969, ,8 , 4. 4.9 ( , ) (55Jacksonville, FL 5,984, .9 4.3 (8, ) 45Kansas City, KS 6,535, 4.9 5.4 (68, ) ( 3Las Vegas, NV 3,6 , 4.3 5.6 (53, ) ( 64Little Rock, AR 6,5 3, ( , ) (49, ) 3. .9 9 , Los Angeles, CA 3 , 39, 6. 6.4 (64, ) (5Louisville, KY , 65, 8.9 9.3 ( 4,Memphis, TN ,996, 4.6 4. ( 4, ) (45Miami-Dade County, FL ,3 9, ,335, 6 6, .9 . 34, Nashville, TN 3,83 , 4.4 6.3 (5, ) 6New York, NY Downtown Manhattan 8 ,333, , , ,6 , 6.4 6.4 ( , ) (3,8New York, NY Midtown Manhattan , 8 , , , 3.3 . , 43, 4New York, NY Midtown S . Manhattan ,893, 3 , . . 46 , 3Oakland, CA 6,89 , 6 , .6 .8 (3 , ) (Orlando, FL , 8, 84, 84, 5, 4.6 5.4 ( 4 , )Philadelphia, PA 4 ,599, .6 .9 ( 34, ) ( 96Phoenix, AZ 9,95 , 69, 9.4 .6 ( 3, ) ( 3Pleasanton/Walnut Creek, CA , , 9. 9. 3, (44Portland, OR 33,34 , 369, 6 , 8. 8.9 335, Raleigh/Durham/Chapel Hill, NC , 8 , 65, 5. 5. , Reno, NV ,3 , 8.8 .5 8, (59Sacramento, CA 8,3 8, 8, 8, 8.9 8.9 , (9

San Diego County, CA , , 6.8 . (45, ) ( 4San Francisco, CA 83, 4, , , 5. 4.9 9 , San Jose/Silicon Valley, CA ,593, 5.3 5. ( 9, ) ( 56Seattle/Puget Sound, WA 59,688, , ,33 , 84 , 5.9 5.6 89, St. Louis, MO 6,45 , 4.8 4. ( 5, ) ( 9Stam ord, CT 8,449, 4 , . .8 ( 3, ) (69Stockton/San Joaquin County, CA 8,5 , 8. .8 58, Tampa, FL 9,356, 4, 4.6 3.9 , 3Washington, DC 39, 49, 365, ,646, ,55 , . .6 88 , West Palm Beach/Palm Beach Co., FL 9,83 , 8.8 9.8 (95, ) (54,White Plains, NY 8, 34, .5 . 3 , 4U.s. TOTAl/AVERAGE , , 7 , , , , , , , . . , ,


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COllIERs INTERNATIONAl | P

UNITE sTATEs | O NTO N O ICE | ClAss A

MARkET


sEP. 30, 2010

VACANCRATE (%)JUNE 30,

2010

VACANCRATE (%)sEP. 30,

2010

ABsORPTIONQ3 2010

(s )

ABsORPTIONT 2010

(s )

AVERAGE ANNUAlQUOTE RENT

(Us Ps )sEP. 30, 2010

QUARTERlCHANGEIN RENT

(%)

ANNUACHANGIN RENT

(%)

Atlanta, GA 3 ,486, . 9.5 6, 398, .4 .4Bakers eld, CA 6 , 6. 6.5 (3, ) 3, .4 .Baltimore, MD 9, 99, 8. 8.5 (35, ) (65, ) 3. - . -Boise, ID , 38, 5. 4.6 , , 8. . -Boston, MA 4 ,536, 3.8 5.4 5, (498, ) 45.6 . -Charleston, SC , 59, .4 8. ( 4, ) ( 4, ) 4. . -Charlotte, NC 5,5 , 8. 5.6 389, 5 8, 5.6 -3.5 -Chicago, IL 4,484, 8. .8 3, 63, 3 .5 .6Cincinnati, OH 5,996, 8.9 8. , (3 , ) .9 .Cleveland 9, 8, .4 . ( , ) 8, . .4Columbia, SC , 5 , 4. 3.4 4, ( 5, ) 9. .Columbus, OH 5,6 , 5. 9.6 36, 6, 9.4 -5.3 -Dallas/Fort Worth, TX ,6 , 3.3 3. ( , ) (3 , ) 5. - .Denver, CO 8, 85, 5. 3. 354, ( 8, ) 6.3 - .9Detroit, MI ,563, 8. .5 54, ( 84, ) . .4

Fresno, CA , 39, 8. 8. , 4.6 . -Ft. Lauderdale/Broward Co., FL 4,4 9, .9 9.8 49, ( 3, ) 3 .4 - .4Greenville, SC ,89 , 9.8 8. 5, , 9.5 -4. -Hart ord, CT 6,369, . . ( 4, ) ( 9, ) 3. - .3Honolulu, HI 4, 9, .8 .8 36, ( 9, ) 35.6 - . -Houston, TX 6, , 9.3 . ( 94, ) (436, ) 35. - .Jacksonville, FL 6,659, 6. 6.3 ( , ) ( 5, ) . .Kansas City, KS ,933, .4 .4 , 54, .9 - .Las Vegas, NV , . .4 ( 8, ) (44, ) 34.9 . -Little Rock, AR ,636, .6 3.3 3, ( 8, ) 6.5 .Los Angeles, CA 5, 84, 5. 4.8 4 , (4 9, ) 39. .3Louisville, KY 4, 6, .6 8.5 ( 4, ) ( 9, ) .8 .Memphis, TN ,898, 3. 4.3 ( , ) ( 4, ) 6.8 - .5 -Miami-Dade County, FL 9, , 4.8 4.6 9, 9 , 4 .8 - .5 -

Nashville, TN ,58 , 3.5 3.5 ( , ) ( , ) . - .New York, NY Downtown Manhattan 58,6 , . . , , , 39.8 - .New York, NY Midtown Manhattan 6 , 8 , 5.3 4.6 94, 3, 38, 63. .New York, NY Midtown S . Manhattan 9,954, 4. .8 63, ,6 6, 4 .5 . -Oakland, CA , 98, .3 .8 (46, ) 9 , 3 . .4Orlando, FL 5,583, . .9 (53, ) (38, ) 4. - .9 -Philadelphia, PA 3 ,53 , .4 . ( 9, ) (336, ) 6. - .3Phoenix, AZ 9,694, .4 .4 (95, ) ( 6, ) 8.3 .Pleasanton/Walnut Creek, CA 6,9 5, .5 .3 3, (33, ) 6. - .5 -Portland, OR 3, , .9 .6 65, 46, 4.4 .Raleigh/Durham/Chapel Hill, NC 3,8 , .5 4.9 ( , ) 3 , . - 4. -Reno, NV 548, 3.5 9.3 3, ( , ) 3.5 .Sacramento, CA 8,9 , . 9.4 54, (6, ) 3 .5 - .5 -San Diego County, CA 6,9 , 6. 5.9 3, 33, 9.3 - . -San Francisco, CA 5 , 3, 5. 5. , ( 6 , ) 36. 8.San Jose/Silicon Valley, CA 3,365, 35. 35. (35, ) ( 9, ) 34. - . -Seattle/Puget Sound, WA 9,68 , 3 .4 3 .5 3 , 55 , 8.4 .9St. Louis, MO ,94 , 5.5 5.5 ( 6, ) (53, ) 9. - .5Stam ord, CT ,45 , ( , ) (6 3, ) 4 . 9.9Stockton/San Joaquin County, CA , 3, . 6.5 65, , 8.4 - .9Tampa, FL 4,8 9, 8. 6.9 8, 4, .8 .Washington, DC 8 ,848, 4.6 4.3 864, 3, 34, 5 .3 .West Palm Beach/Palm Beach Co., FL 3,3 3, .9 5. (68, ) (6 , ) 36.9 - . -White Plains, NY 5,4 , 4. 3.3 4 , 6 , 9. - .U.s. TOTAl/AVERAGE , , . . 7 , 7 , , , . .

. - . - . 7weighted

equal




UNITE sTATEs | sUBURBAN O ICE | All INVENTOR

MARkET


sEP. 30, 2010

NE sUPPlQ3 2010

(s )

NE sUPPlT 2010

(s )

UN ERCONsTRUCTION

(s )

VACANCRATE (%)

JUNE 30, 2010

VACANCRATE (%)

sEP. 30, 2010

ABsORPTIONQ3 2010

(s )

ABsORPTIOT 2010

(s )

Atlanta, GA 86,6 , , , 93, 9 , 8. 8.3 ( , )Bakers eld, CA 5,968, . .6 (35, ) 6

Baltimore, MD , 6 , 3 , , 95, ,355, .9 3. 9 , Boise, ID , 84, 34, 3 , .4 .8 (66, ) (Boston, MA 4,3 3, 356, 356, 59, 9.8 8.9 , , Charleston, SC 8,5 , 3, 566, .4 .6 ( 4, )Charlotte, NC , 45, 46, , 34 , 5.3 4.6 99, Chicago, IL 4,8 9, 4, , 3.6 4. (5 6, ) (Cincinnati, OH 5, 9, , 8 , 94, 4. 5. (95, )Cleveland 9 ,335, 6, 83, 385, .4 .3 3 , Columbia, SC 4, 8 , .3 . , (8Columbus, OH 35, 5 , 9 , .3 8.5 ( 43, )Dallas/Fort Worth, TX 65, 6, ,584, 86, .8 .3 ,356, Denver, CO 9,389, 98, 8, 8, 5. 5.6 (343, )Detroit, MI 99,95 , , 43, 5, .9 .4 ( 5 , )Fair eld, CA 3,6 , 6.4 6.6 (9, ) (93Fair eld County, CT 4 ,843, 33, . .5 ( 9, ) ( 6Fresno, CA , 8 , 5, 4 , 5. 5. 6, Ft. Lauderdale/Broward Co., FL 44, 8 , 83, 4.8 4.5 45, 3Greenville, SC 4,335, .3 3.3 ( 4 , ) (89Hart ord, CT ,35 , 4, 5.3 5. 4 , (Honolulu, HI ,69 , - - (3 , ) (Houston, TX 5 ,63 , 34, 4 , . . 85, Jacksonville, FL 58,655, , , .6 5.5 ( , )Kansas City, KS 8, 66, 6, , 99, .9 3. ( 43, ) (Las Vegas, NV 38,394, , 9, 85, 5. 5. , (Little Rock, AR ,43 , ( , ) ( , ) 3, .3 .6 ( 9, )Los Angeles Inland Empire, CA ,938, 4 , 4. 5. (9 , ) (Los Angeles, CA 65,8 , 5 8, 8 , . 8. (498, ) ( ,

Louisville, KY 33,6 4, 43, 4, .5 3.5 (59, ) (Memphis, TN ,9 8, , 3. 3. (3, )Miami-Dade County, FL 64,8 , 4, 6 6, 38 , 5. 4. 34 , Nashville, TN 3,4 3, 55, 5 8, , .4 . 9, New Jersey Central 65,9 , 46, 343, .3 . 9 , (5New Jersey Northern 95,46 , 58, .9 8.5 (593, ) (4Oakland, CA 5,8 , . . 4, Orange County, CA ,35 , 3. .4 3 , (96Orlando, FL 54,4 6, 55, 6 , .3 .4 (4 , )Philadelphia, PA 9, 9 , 558, 3, 563, 6.3 6.3 39 , Phoenix, AZ 9, 58, 86, 553, 5 8, 3.3 .9 96, Pleasanton/Walnut Creek, CA 3 , 8, 8.8 . (6 , ) (56Portland, OR 44,3 8, 5 , 3. .9 ( 5, ) (Raleigh/Durham/Chapel Hill, NC , , 8, 356, 3, 5. 4.4 444, Reno, NV 5,46 , .9 . 6, (3Sacramento, CA , 45, 34, 3 , 5, 8.6 8.8 ( 4, )San Diego County, CA 6 ,5 3, 9 , .9 . 38 , San Francisco Peninsula, CA 33,5 8, 5, 8.4 . 3 , 3San Jose/Silicon Valley, CA 53,499, 343, 9 , 9. .4 (953, ) (6Seattle/Puget Sound, WA 9,68 , 3 , 99, 5.3 5. 35, (St. Louis, MO 9 , 94, 489, 555, 568, .8 . 556, Tampa, FL ,668, 6. 5.3 3 , ( 6Washington, DC 3 3,6 9, 389, , 8, 8, 4. 4. 6 , West Palm Beach/Palm Beach Co., FL 8,834, 3 , 83, , .6 .6 , Westchester County, NY 3 ,95 , .4 . ( 9 , )U.s. TOTAl/AVERAGE , , , , , , , , , . . , , ,


5/8



UNITE sTATEs | sUBURBAN O ICE | ClAss A

MARkET


sEP. 30, 2010


2010


2010

ABsORPTIONQ3 2010

(s )

ABsORPTIONT 2010

(s )


(Us Ps )sEP. 30, 2010


(%)

ANNUAlCHANGEIN RENT

(%)

Atlanta, GA 8 , 6, 9. 8. 33, 56, .6 - .8Bakers eld, CA ,69 , 5. 6.9 (34, ) 3 , 4. .Baltimore, MD 3 , 6, 8.6 . 99, 54 , 6. - .Boise, ID 4,564, .6 .4 ( , ) ( 3, ) 8. .Boston, MA 44, 56, 9. .5 8 , ,46 , 6. - .8Charleston, SC 4,333, 5.8 4.3 6 , 496, 3.5 - .9 -Charlotte, NC 8, 3 , 8.9 .9 5 , 5, .4 .Chicago, IL 5 ,646, 5. 5.6 (3 , ) (3 , ) .5 .Cincinnati, OH 3,398, 4.4 4.8 (53, ) ( 53, ) .4 - .3Cleveland ,69 , . .3 (68, ) ( 9, ) . - .Columbia, SC 996, .9 .9 , . .Columbus, OH ,565, .8 .9 3 , 98, 8. - .8Dallas/Fort Worth, TX 96, 39, 9.3 8.5 36, 66, 4.8 .Denver, CO 4 , 8 , 9.9 9.4 39 , 9, .8 .Detroit, MI 5, 89, .5 8. ( 5 , ) ( 53, ) . - .

Fair eld, CA , 9 , 3 .3 3 . 5, ( 4, ) 6. -4.Fair eld County, CT 6,98 , .5 .6 (5, ) (8, ) 34.4 .Fresno, CA 3,8 , 4. .9 89, 59, 5. .Ft. Lauderdale/Broward Co., FL ,38 , . . 3, , 8. - .Greenville, SC , , . . (5 , ) (5 , ) .6 - .Hart ord, CT ,466, 6.9 5.8 83, ( 3, ) .4 .Houston, TX 68,5 3, 9.6 9.3 , , .3 - .Jacksonville, FL 9, 4 , 4. 3. 56, 3, .8 - .Kansas City, KS 5,459, 8. 5.9 , , .4 - .3Las Vegas, NV 4,9 , 36.6 36.3 (5 , ) (58, ) 3 .8 - . -Little Rock, AR ,689, 6. . 98, (98, ) 8.5 .Los Angeles Inland Empire, CA 4,953, 33.5 34. ( 9, ) 3, 5. -3.Los Angeles, CA ,895, 8.9 8.4 (566, ) ( ,856, ) 34.3 - .Louisville, KY , 4 , .6 8. 5 , 9, . .9Memphis, TN , 3 , 8. 9.4 (55, ) 33, .6 .6Miami-Dade County, FL 5,468, . . 5, 34 , 3 .5 - .Nashville, TN ,8 4, 9. 8.9 9, 5 , . - .4New Jersey Central 46,649, 4.5 4.4 46, ( 5, ) 3.6 - .3 -New Jersey Northern 63, , .8 8. ( 3 , ) (3 , ) 4.3 - .3Oakland, CA 3,58 , 8. . (45, ) ( 6 , ) 4.5 - 3.9Orange County, CA 33,3 9, 4.8 4. 59, (385, ) 6.6 - .6 -Orlando, FL 6,653, . .6 ( 6, ) (35 , ) .8 .Philadelphia, PA 6 ,83 , 5. 6.3 44, 4 , 4.3 .Phoenix, AZ 3 ,366, .4 6. 5, 33 , 4.4 - .9Pleasanton/Walnut Creek, CA 6, 64, 4. 4.9 ( 5, ) , .6 - .5Portland, OR ,6 , .3 . ( , ) ( 36, ) 3. .Raleigh/Durham/Chapel Hill, NC 5,584, 8. .3 6, 389, .5 .Reno, NV ,935, 9.8 9.8 ( , ) 6 , 9. - .8Sacramento, CA 6, , 5.6 5.6 6 , (4 , ) 4. - .9San Diego County, CA 4, 4 , .9 9. 4 6, 86 , 3 .9 - .San Francisco Peninsula, CA , 85, .9 6.8 45, 35 , 3 . - .3 -San Jose/Silicon Valley, CA 5,65 , .9 4. (6 9, ) 6 , 35.6 - .Seattle/Puget Sound, WA 6, 88, .8 .6 8 , ( , ) 3. - 3.St. Louis, MO 5, 9 , .5 . 4 , 5 , 3.3 - .3Tampa, FL 3,4 3, .9 .3 43, (6, ) 3.6 - .Washington, DC 6 , 9 , 6. 6. 464, ,3 , 3 .9 .4West Palm Beach/Palm Beach Co., FL 9, 5, 3. .5 , 8, 3 .4 - .9Westchester County, NY 8,33 , 3. 4.5 ( 5 , ) 6 , .8 .U.s. TOTAl/AVERAGE , , 7 , .77 . , , , , . - .

. - . 7 - .weighted

equal




CANA A | O NTO N O ICE | All INVENTOR

MARkET


sEP. 30, 2010

NE sUPPlQ3 2010

(s )

NE sUPPlT 2010

(s )

UN ERCONsTRUCTION

(s )

VACANCRATE (%)

JUNE 30, 2010

VACANCRATE (%)

sEP. 30, 2010

ABsORPTIONQ3 2010

(s )

ABsORPTIOT 2010

(s )Calgary, AB 3 , 5, , , ,98 , 5. 3.8 553, ,Edmonton, AB ,63 , 63 , . .5 ( 9, ) (Hali ax, NS 4,9 3, , , 5.9 6.4 ( 6, ) (9Kitchener-Waterloo, ON ,3 , 53, 65, 5.6 9.8 3 , Montreal, QC 49,4 9, 6. .4 (3 6, ) ( 55,Ottawa, ON 4,99 , 55 , 4. 4. 49, 5,Regina, SK 3, 6 , 9 , .5 .3 6, (3,Saskatoon, SK , 5 , 9, 9, 4.6 5.8 ( , ) 4Toronto, ON 88, , 66 , ,84 , 5.4 5.5 8 , 9Vancouver, BC 4,466, , 3.8 4.4 ( 34, ) 6CANA A TOTAl/AVERAGE , , , , , , , 7. 7. 7 ,

CANA A | O NTO N O ICE | ClAss A

MARkET


sEP. 30, 2010


2010


2010

ABsORPTIONQ3 2010

(s )

ABsORPTIONT 2010

(s )


(CA Ps )sEP. 30, 2010


(%)

ANNUACHANGIN RENT

(%)Calgary, AB 4, 83, 4.4 .4 5 , ,49 , 39.5 .Edmonton, AB 8, 54, 6. . ( 8, ) ( , ) 39.9 - .8 -Hali ax, NS ,9 6, 5.4 5. , (3 , ) 3 .6 .Kitchener-Waterloo, ON 95, 9.5 5.8 89, 5 , .5 3.Montreal, QC 3, 6, . .6 ( 9, ) ( , ) 3 . .Ottawa, ON 9, , 4.5 3.9 6 , 5, 48.3 - .4Regina, SK , 6, . . , ( , ) 34.8 .Saskatoon, SK 49 , .5 . 34, 3 .5 .Toronto, ON 4 ,59 , . 6.8 6 3, 65 , 49. - .Vancouver, BC , 34, .5 .6 ( , ) 6 , 54.5 4.8CANA A TOTAl/AVERAGE , , 7. 7. , , , , . - .

. - . - .

CANA A | sUBURBAN O ICE | All INVENTOR

MARkET

EXIsTING

INVENTOR (s )sEP. 30, 2010

NE sUPPl

Q3 2010(s )

NE sUPPl

T 2010(s )

UN ER

CONsTRUCTION(s )

VACANC

RATE (%)JUNE 30, 2010

VACANC

RATE (%)sEP. 30, 2010

ABsORPTION

Q3 2010(s )

ABsORPTIO

T 2010(s )Calgary, AB 3,3 , 86, 4 4, . .5 48, 4Edmonton, AB 8, 53, 4 , 5.3 6.3 (55, ) ( 3Hali ax, NS 6, 3, 3 , 38, , 3.9 .8 , Kitchener-Waterloo, ON 3, 6 , 6, 6, 56, . .6 9, Montreal, QC 3,6 , 9 , 9 , , 8 .9 9. , Ottawa, ON ,559, 4, 4, 8 , .8 . 9 , ,Regina, SK 659, , , .6 .6 (3,Toronto, ON 9 ,6 4, 64, 983, 698, .6 .5 6 9, ,Vancouver, BC 8,64 , ( 8, ) 395, 88 , 9.9 . (4 , )CANA A TOTAl/AVERAGE , , , , , , , . . ,7 ,

CANA A | sUBURBAN O ICE | ClAss A

MARkET


sEP. 30, 2010


2010


2010

ABsORPTIONQ3 2010

(s )

ABsORPTIONT 2010

(s )


(CA Ps )sEP. 30, 2010


(%)

ANNUACHANGIN RENT

(%)Calgary, AB ,6 9, .6 .4 8, 4 , 3 .5 .6Edmonton, AB 4,834, 5. 3.8 , , 3 . .8Hali ax, NS ,555, 6.4 . , 8, 6. .Kitchener-Waterloo, ON ,446, 6. 5. 6, , 6. - .Montreal, QC 3, 6, .6 8.4 69, 46, 4. .Ottawa, ON ,566, 8. .9 36 , 6 5, 3 . -3.Regina, SK 659, .6 .6 (3, ) 4.5 . -Toronto, ON 4 , 95, . .5 6 4, 98 , 3 .6 .3Vancouver, BC 3,58 , .5 .5 3 , 4 , 36. 4.8Victoria, BC 69, - - - - 3 .5 - -CANA A TOTAl/AVERAGE , , . . , , , , . .

. . .weighted

equal

weighted

equal


7/8



rst drop (albeit very small) in vacancy a ter eleven consective quarterly increases. Ofce vacancies nished the quarter

at 1 .2 percent and possibly marked the beginning o a logradual decline in vacancy. During the third quarter thDowntown vacancy rate decreased basis points to register1 . percent while suburban vacancies held steady at 1 .percent. One change o note was during the quarter downtown Class A vacancies moved signi cantly lower, droppi

2 basis points to register 1 . 7 percent. Canadian ofce va-cancy rates were mixed with central business district (CBDvacancies rising basis points to 7.1 percent while suburbavacancies decreased basis points to .02 percent.

Ofce occupancie up or the econd con ecutive quarterPossibly heralding the beginning o the next up cycle, U.S.

ce markets collectively posted another quarter o positiv

absorption. This second quarter o positive absorption cama ter nine consecutive quarters o negative absorption begining rst quarter 200 . Third quarter absorption came in a

. MSF (million square eet) which was a substantial crease rom the second quarter when occupied space in-creased by 1. MSF. Third quarter absorption was also a signi cant improvement rom the year ago period when 17.7 Mwas returned to the market. Examining third quarter absorption in detail shows 2% o newly occupied space was Class A buildings re ecting a move by tenants to upgrade thepremises o ten with little additional cost. Canadian markalso recorded an increase in occupied space during the thirdquarter with absorption totaling 2.7 MSF.

Rent picture increa ing y mixed. Third quarter rent dashows CBD rents increased a urther 1. percent to averag$ .0 per square oot while suburban rents largely hesteady dropping by just two cents a square oot to $2 .22Looking beyond the headline numbers, however, shows moofce markets are still characterized by declining rents. Thereason or this apparent contradiction is rental averages areinventory-weighted and so a ew large markets can skew thnational averages. Without this weighting e ect, third quater CBD rents ell 0. percent and suburban rents dropped b1. %. Canadian downtown ofce rents moved lower duringthe quarter with CBD quoted rents decreasing 2.7% whilsuburban rents increased 1.2%.

Ofce con truction pipe ine continue to empty out. Thquarter ofce completions totaled just . MSF, a signi candrop rom the second quarter when construction totaled 11MSF, and the lowest on record. Going orward ofce development will remain extremely subdued with construction activi

alling to just 20. MSF at quarter end, compared with 2MSF at the end o the second quarter and well below the 12MSF underway at midyear 200 . Construction is expected tdri t lower and with the exception o just a small numberbuild-to-suits and a ew select speculative developments, o

ce development will be absent rom the U.S. ofce landscapby as soon as mid-2011.

Ofce Markets Show First Signs oBeginning a Long Slow Road to Recovery

Continued rom page 1

UNITE sTATEs | O ICE INVEsTMENT

MARkET

CBsAlEs PRICE

(Us Ps )

CBCAP RATE

(%)

sUBURBANsAlEs PRICE

(Us Ps )

sUBURBANCAP RATE

(%)

Atlanta, GA 8 . 8. 3 . 9.4Bakers eld, CA 8. 9. 6 .

Charleston, SC 5 . 8. 35. .Chicago, IL . . 5 . 8.Columbus, OH 8. Dallas/Fort Worth, TX 5. 8. 5Denver, CO 95. 8. 53. 8.5Fair eld County, CT 5 . 8.Fresno, CA 6 . 9. . 8.5Ft. Lauderdale/Broward County, FL 83. 5 6.65 8 . Hart ord, CT . 36. 8.6Honolulu, HI 5 . . Houston, TX 5 . 8.8 . 8.8Jacksonville, FL . 9. 5 . 8. 5Las Vegas, NV 49.

Little Rock, AR 88. 9 . 9.Los Angeles Inland Empire, CA . Los Angeles, CA 33 . 6. 5. 8.Miami-Dade Country, FL 3 9. New York, NY Downtown Manhattan 35 . 6. New York, NY Midtown Manhattan 4 . 5. New York, NY Midtown S . Manhattan 4 . 6. Oakland, CA 8. 9.Orange County, CA 6 . 8.Orlando, FL 83.59 . 8 9.Philadelphia, PA . 9. . 9.Phoenix, AZ 5. Pleasanton/Walnut Creek, CA .5 8. 8 .5 8.5

Portland, OR 6 .58 59.56 . 6Sacramento, CA . 8.5 5 . 8.San Diego County, CA 4.5 8 .66 8.45San Francisco Peninsula, CA 5 . 6.5San Francisco, CA 3 4. 6. 5 Stam ord, CT 35 . 8. Stockton/San Joaquin County, CA 34. 8.8 Tampa, FL 8.3 .5Washington, DC 4. 5.8 West Palm Beach/Palm Beach Co., FL 9 .44 .5 5.39 .Westchester County, NY 5 . 8.

CANA A | O ICE INVEsTMENT

MARkET

CBsAlEs PRICE

(CA Ps )

CBCAP RATE

(%)

sUBURBANsAlEs PRICE

(CA Ps )

sUBURBANCAP RATE

(%)

Calgary, AB 34 . 6.5 335. . 5Kitchener-Waterloo, ON 6 . 8. . . 5Montreal, QC 5. . 9 . . 5Ottawa, ON . . 5 45. .6Regina, SK 3. .45 Saskatoon, SK 5. . 5 - -Toronto, ON 6 . 5 . 9.3Vancouver, BC 45 . 5. 33 . 6.5


8/8


Inventory Includes all existing multi- orsingle-tenant leased and owner-occupied ofceproperties greater than or equal to 10,000square eet (net rentable area). In some largermarkets this minimum size threshold may varyup to 0,000 square eet. Does not includemedical or government buildings.

Vacancy Rate Percentage o total inventoryphysically vacant as at the survey date includingdirect vacant and sublease space.

Ab orption Net change in physically occupiedspace over a given period o time.

New supp y Includes completed speculativeand build-to-suit construction. New supplyquoted on a net basis a ter any demolitions orconversions.

Annua Quoted Rent Includes all costsassociated with occupying a ull oor in themid-rise portion o a Class A building inclusiveo taxes, insurance, maintenance, janitorial andutilities (electricity surcharges added whereapplicable). All ofce rents in this report arequoted on an annual, gross per square ootbasis. Rent calculations do not includesublease space.

Cap Rate (Or going-in cap rate) Capitalizationrates in this survey are based on multi-tenantinstitutional grade buildings ully leased atmarket rents. Cap rates are calculated bydividing net operating income (NOI) bypurchase price.

Note: s = Square FeetPs = Per Square FootCB = Central Business District

Glossary

COllIERs INTERNATIONAl

01 Union Street, Suite 00Seattle, WA 101TEl +1 20 22 0

AX +1 20 7 7 27

OR MORE IN ORMATION

Ross J. MooreChie Economist | USATEl +1 17 722 0221EMAIl [email protected]

0 ofces in1 countries on continents

United States: 1Canada: Latin America: 17Asia Paci c: 1EMEA:

$1.9 billion in annual revenue

2.4 billion square ee underanage en

ver 15,000 pro essionals

Copyright 2010 Colliers International.

The in ormation contained herein has been obtainedrom sources deemed reliable. While every reasonable

e ort has been made to ensure its accuracy, we cannotguarantee it. No responsibility is assumed or anyinaccuracies. Readers are encouraged to consult theirpro essional advisors prior to acting on any o thematerial contained in this report.

Accelerating success.

Nashville, Tennessee

colliers north american office highlights 3q 2010

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