Business Journal: Office Vacancies Up
Office landlords are feeling the brunt of the housing meltdown and oversupply as vacancy rates increase.
Monday, January 21, 2008
Office leasing in Greater Sacramento ended 2007 with a whimper as vacancy rates rose for the third straight quarter. Two brokerage reports suggest smaller landlords are bearing more of the burden. Larger buildings are still finding tenants, including many in the public sector. Overbuilding could be part of the problem. For several years, booming expansion ate up available leases, and developers continued to heap more space on the market. Even at the beginning of this year, lease rates were rising and space was getting tighter. But the fallout from the housing downturn and various companies closing shop is now unhinging the office market. Brokers are anticipating vacancy flat rates for the first half of the year. Sacramento isn’t alone. The rising rates mirror a national trend. U.S. office vacancy rose for the first time in four years.