4th Quarter 2010
With a modest increase of 3.2 percent in Gross Domestic Product (GDP) during the Fourth Quarter of 2010 up from 2.6 percent in the Third Quarter. The American economy appears to be trending positively.
As a result of the improving economy, the corporate real estate market grew modestly for the first time in nearly three years during the final quarter of 2010, adding 2.5 million square feet of new office space and signaling that the market has begun to recover from its bottom.
According to the property research firm REIS Inc., this trend suggests that in many areas of the country there is a shift in market power from tenants back to landlords as companies that had postponed real estate decisions move back into the leasing market.
Average rents also rose by a modest 0.2 percent to $22.09 per square foot, the first increase since the Second Quarter of 2008. The biggest increases in average rent during the quarter occurred in Pittsburgh, New York City and San Francisco highlighted by increased demand for space from financial services and technology firms.
It also appears that investors with sizable financial resources took note of opportunities in the corporate real estate market in cities that were hit hard by the recession and have consequently purchased large office buildings–yet another indication the market is improving.
So if you have postponed your plans to expand or relocate, contact your local ITRA office now to take advantage of incentives before negotiating power swings toward landlords.
– Ross Selinger