SA: 2007 DT office space forecast

[21bl0wed]

http://sanantonio.bizjournals.com/sa...ml?jst=b_ln_hl

San Antonio's Class A office market rental rates in the Central Business District are likely to stay flat or recede slightly in 2007.

That's according to Chicago real estate firm Grubb & Ellis Co.'s (NYSE: GBE) 2007 Global Real Estate Forecast, which was released Tuesday.


If interest rates continue to be stable, construction costs remain in check and the economy continues to grow as expected, the real estate investment market should remain healthy across the United States.

"We expect the economy to find a middle ground between an outright recession and inflationary growth -- the elusive soft landing -- thereby striking a balance between the commercial real estate leasing and investment markets," says Robert Bach, senior vice president of research and client services for Grubb & Ellis.

Businesses nationwide are expected to use their record profits to add staff and lease more space in 2007, the report says. About 25 percent of the expected 100,000 new payroll jobs that will be added per month in 2007 will be located in office buildings.

Grubb & Ellis reports that the 2006 office vacancy rate ended the year at 13.6 percent. By the end of 2007, however, the national office vacancy rate is projected to stand at 13.2 percent.

San Francisco; Seattle; Miami; San Jose, Calif.; and Midtown Manhattan are expected to post double-digit rental rate increases in 2007. Twenty downtown office markets will see Class A rates rise by 5 percent or more in 2007.

However, Class A rates will remain flat in a number of markets, including Cincinnati; Omaha, Neb.; Atlanta; Pittsburgh; San Antonio; Detroit and Wilmington, Del.

This sucks for SA....Looks like office highrise proposals dt will not happen this year.