Mid Atlantic Real Estate Journal — Commercial Office Spotlight — March 30 - April 12, 2012 — 5B
C OMMERCIAL O FFICE S POTLIGHT
Q4 2011 | OFFICE
RESEARCH & FORECAST REPORT EASTERN PENNSYLVANIA | SOUTHERN NEW JERSEY | DELAWARE
Stable or Stalled? REGIONAL OVERVIEW
The regional office markets did not register any measurable improvement during the third and fourth quarters of 2011. The perception is that market fundamentals are less fragile than in the previous two years, but this has yet to be reflected in occupancy trends. Overall, companies are still attempting to minimize the need for additional space when making lease decisions. Annual absorption, at 511,662 square feet, was slightly higher than 2010’s annual total and represents the second year of positive absorption. Leasing activity was sporadic rather than steady, but there were some significant new transactions. One example is Endo Pharmaceuticals; the company announced plans to move from Chadds Ford to a new 300,000-square-foot build-to-suit at Atwater Corporate Center. The regional vacancy remained at 14.7 c percent. Absorption was flat for the fourth c Tenants are still in the driver’s seat for c lease negotiations, with cost-savings driving decisions. Building sale activity remained light, c
2011 Q3 2012 Q1
VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE
quarter, and low but positive for the year. Class A buildings had one million square feet of positive absorption, while Class B buildings lost over 500,000 square feet.
but there was an increase of properties on the market.
UPDATE New Supply, Vacancy and Absorption Arrows compare current quarter to the previous quarter and forecast the next quarter.
MAJOR OFFICE MARKET VACANCY
Wilmington / New Castle
02 03 04 05 06 07 08 09 10 11
Of the regional major market areas, only the Lehigh Valley is back to a pre-recession vacancy levels.
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