US Commercial Rents Grow
News: Average apartment rents in the US are expected to rise 4.0% by the end of 2013, and another 4.0% in 2014, World Property Channel reports. The vacancy rate in US apartments is estimated to increase by 0.1% to 4.0% during Q313, despite a surge in new construction. Vacancy rates below 5% are considered as a landlord's market. The quarterly report, by the National Association of Realtors, also expects to see net absorption for the multifamily housing market to amount to 266,700 units in 2013, and 259,800 units in 2014. Meanwhile office rents are expected to climb 2.5% this year, and 2.8% in 2014; while net absorption of office space, both new and existing leases, is predicted to reach 30.1mn square feet in 2013, and 42.6mn in 2014.
BMI View: New York and Los Angeles generally command higher office rents than Chicago, Dallas and Philadelphia. These three cities have long histories as financial centres, which carry the kind of reputation required to command such high rental levels. However, in the 24-month period from January 2011 to end-2012, it was Los Angeles that saw the greatest overall fall in office rental levels from US$108/m2 per month to US$48.50. While Dallas recorded the largest increase at the maximum end. Our full-year 2012 in country interviews and the picture they produced for office rents reflects the economic troubles that continued to plague the country, and the return of optimism to the market has yet to announce itself emphatically upon the data.