Host,
Contrary to your original premise that the housing slump would create a domino affect on the economy, it appears that first the single family housing slump will be in-part offset by an increase in multi-unit residential construction. And it appears that the commercial real estate market is red hot as indicated by rising rents and lower vacancy rates. Perhaps some of the Miami condos will be converted, or more likely - rising commercial rents will lead to more commercial development. Smart money seems to be able to stay one step ahead of the headlines.
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Meanwhile, demand for office space has been growing. Net absorption -- a measure of the space taken up by commercial tenants -- increased markedly during the latest quarter, a sign that the economy is producing more office jobs, says Sam Chandan, chief economist for Reis. Nationwide, the office-vacancy rate, at 12.7%, is the lowest since the third quarter of 2001.
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Quote:
Nationwide, effective rents on office properties -- the amount tenants pay after concessions -- jumped an average of 3.1% during this year's second quarter, up from gains of 2.8% in the first quarter and 2.1% in the year-earlier period, according to a report scheduled for release today by real-estate research firm Reis Inc.
That was the sharpest quarterly increase since the third quarter of 2000, before the combined effects of the technology-stock bust and the Sept. 11, 2001, terrorist attacks caused office vacancies to rise and rental rates to fall.
[Hot Markets]
The red-hot commercial sector offers a sharp contrast with the housing market, which has been slumping for the past two years or so.
In some cities, today's higher rents reflect strong economic fundamentals. In New York and Washington, for example, fatter corporate profits are spurring companies to step up hiring, fueling demand for additional space at a time when supply is tight. Vacancy rates in some of these markets have fallen to single digits, in part because high land prices and strict zoning requirements have kept a lid on construction of new office buildings.
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http://online.wsj.com/article/SB1183..._whats_news_us
Host, please let me know when you concede that your premise is wrong.
__________________
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Last edited by aceventura3; 07-05-2007 at 10:03 AM..
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