C O L L I E R S I N T E R N AT I O N A L

N O RT H A M E R I C A

Highlights
OFFICE

F I R S T Q U A RT E R

2009

U.S. Office Space Market Posts Weakest Quarter Since Q3 2001

MARKET INDICATORS
Q1
Q2
2009 2009*
VACANCY
NET ABSORPTION
CONSTRUCTION
RENTAL RATE
* Projected, relative
to prior period

U.S. OFFICE MARKET

SUMMARY STATISTICS
FIRST QUARTER 2009

Vacancy Rate Q1 2009 (Change from

Q4 2008): 14.75% (+0.95)
Absorption Q1 2009
(Million Square Feet): -26.7

For the fifth consecutive quarter tenants returned more space to the market than they leased
helping to push the national vacancy rate up for the sixth consecutive three month period.
A modest supply of office development also came on the market during the first quarter again
helping to put upward pressure on the national vacancy rate. Rents accelerated downward as
landlords had no choice but to lower lease rates to attract new tenants and keep occupancies from
declining any further. This was more apparent in downtown markets but suburban rents also
moved lower. While the economy may bottom sometime in the third quarter the prospects for the
office market are not encouraging until well into 2010 or perhaps 2011. Almost every region of the
country is reporting weak economic growth with heavy job losses expected for the next
few months and little hope of employment gains until early 2010. Weakness that was largely
restricted to the financial services and housing sector has now spread to the economy at large
with very few industries considering expansion or new hiring. With such an uncertain business
environment the office space market will remain extremely weak through to the end of 2009.
U.S. office vacancy rate posts sixth consecutive increase. The US national office vacancy
rate moved substantially higher during the first quarter marking the sixth consecutive increase.
Aided by sublease space increasing by 7.5 million square feet (MSF) to total 81.6 MSF the
overall vacancy rate increased 95 basis points to register 14.75%. Vacancy levels have now
returned to Q2 2005 levels. The Downtown vacancy rate increased 87 basis points to register
12.79% while suburban vacancies increased 98 basis points to total 15.67%. Class A vacancy rates
also moved higher with prime CBD vacancies rising 93 basis points to 12.28% compared with
suburban vacancies which increased 108 basis points to 16.45%.
A trickle turns into a flood as tenants seek to reduce their space needs. First quarter
absorption was again negative with occupied space contracting by 26.7 MSF, the fifth consecutive
quarterly contraction and significantly worse than a year ago when absorption was -1.3 MSF and
more than double Q4 when occupied space fell by 11.4 MSF. Companies are now shedding space
at the quickest pace since Q3 2001 when occupied space shrank by 28.0 MSF. Highlighting the
widespread nature of the current downturn, CBD and suburban markets were equally affected as
were prime and non-prime office properties.

(Continued on page 6)

U.S. OFFICE MARKET Q1 2008 Q1 2009

New Construction Completions

Q1 2009 (Million Square Feet): 15.4

Asking Rents Per Square Foot

(Change from Q4 2008)
Downtown Class A: $43.36 (-5.5%)
Suburban Class A: $27.69 (-1.4%)
Tenant Inducements
Per Square Foot/Free Rent (Months)
Downtown Class A: $29.63 (4.3)

14.8

20.3

19.4

20

Million Square Feet

Under Construction Activity

(Million Square Feet): 83.8

25
17.4

15.4

15

-5

14.0%

13.8

10
5
0

15.0%

18.6

13.3

13.5

13.0

13.0%

-1.3

-1.6

-2.2

-10
-11.4

-20

-26.7

-30
Q1 2008

Q2 2008

Absorption

Q3 2008

Q4 2008

Completions

Q1 2009
Vacancy

www.colliers.com
Colliers International 2009 Colliers International is a worldwide affiliation of independently owned and operated companies.

COLLIERS INTERNATIONAL

UNITED STATES

MARKET

EXISTING
INVENTORY (SF)
MARCH 31, 2009

Atlanta, GA
55,688,000
Bakersfield, CA
2,926,000
Baltimore, MD
19,471,000
Boise, ID
3,470,000
Boston, MA
57,591,000
Charleston, SC
2,064,000
Charlotte, NC
19,023,000
Chicago, IL
130,460,000
Cincinnati, OH
12,707,000
Cleveland, OH
30,081,000
Columbia, SC
4,460,000
Columbus, OH
9,673,000
Dallas/Fort Worth,TX
35,365,000
Denver, CO
26,608,000
Detroit, MI
29,744,000
Fresno, CA
3,206,000
Ft. Lauderdale/Broward County, FL
6,122,000
Greenville, SC
3,144,000
Hartford, CT
10,096,000
Honolulu, HI
15,706,000
Houston,TX
37,422,000
Indianapolis, IN
11,559,000
Jacksonville, FL
12,878,000
Kansas City MO-KS
11,285,000
Las Vegas, NV
3,369,000
Little Rock, AR
6,280,000
Los Angeles, CA
31,409,000
Louisville, KY
10,105,000
Memphis,TN
8,451,000
Miami/Dade County, FL
15,165,000
Milwaukee,WI
10,629,000
Minneapolis/St. Paul, MN
24,422,000
Nashville,TN
7,524,000
New York, NY - DT Manhattan
89,744,000
New York, NY - MT Manhattan
257,412,000
New York, NY - MTS Manhattan
98,339,000
Oakland, CA
16,913,000
Orlando, FL
11,611,000
Philadelphia, PA
41,978,000
Phoenix, AZ
19,972,000
Pleasanton/Walnut Creek, CA
22,370,000
Portland, OR
32,824,000
Raleigh/Durham/Chapel Hill, NC
3,712,000
Reno, NV
1,318,000
Sacramento, CA
18,680,000
San Diego County, CA
10,100,000
San Francisco, CA
82,895,000
San Jose/Silicon Valley, CA
7,275,000
Santa Rosa/Sonoma County, CA
1,070,000
Seattle/Puget Sound,WA
57,644,000
St. Louis, MO
11,401,000
Stockton/San Joaquin County, CA
7,272,000
Tampa, FL
8,508,000
Washington, DC
114,200,000
W. Palm Beach/Palm Beach County, FL 8,847,000
Total US
1,592,187,000

COLLIERS INTERNATIONAL

DOWNTOWN OFFICE

NEW
SUPPLY Q1
2009 (SF)

0
0
0
0
0
0
0
1,350,000
0
0
0
0
0
0
0
114,000
0
0
0
0
0
0
0
44,000
0
23,000
0
0
0
0
0
0
75,000
0
2,102,000
0
0
0
0
0
0
124,000
(26,000)
0
0
0
0
0
0
31,000
0
0
0
908,000
0
4,744,000

UNDER
CONSTRUCTION
(SF)

1,260,000
0
803,000
0
1,544,000
0
2,817,000
2,303,000
825,000
0
190,000
195,000
0
496,000
0
0
0
60,000
0
0
1,817,000
0
0
0
0
0
0
0
0
1,982,000
0
0
520,000
4,600,000
1,438,000
315,000
172,000
10,000
0
1,030,000
0
908,000
24,000
0
434,000
40,000
468,000
300,000
0
4,797,000
0
30,000
0
8,446,000
0
37,826,000

ALL INVENTORY

ABSORPTION
Q1 2009
(SF)

63,000
(9,000)
(70,000)
(13,000)
(580,000)
(28,000)
(204,000)
(507,000)
(3,000)
(76,000)
(45,000)
(36,000)
317,000
(266,000)
(57,000)
28,000
(14,000)
0
(205,000)
(849,000)
(171,000)
17,000
(13,000)
17,000
(82,000)
24,000
46,000
(32,000)
(50,000)
(50,000)
(192,000)
(15,000)
(50,000)
(3,000)
(3,596,000)
(1,647,000)
(47,000)
(130,000)
(304,000)
(161,000)
(831,000)
(99,000)
(27,000)
(12,000)
92,000
21,000
554,000
(164,000)
(18,000)
(641,000)
24,000
(33,000)
(64,000)
174,000
(17,000)
(10,034,000)

VACANCY
RATE (%)
DEC. 31, 2008

VACANCY
RATE (%)
MARCH 31, 2009

13.40
6.34
17.38
9.52
10.51
6.60
2.56
12.69
17.32
16.30
12.53
13.06
20.59
14.12
16.12
8.34
14.87
23.79
14.86
5.04
12.44
14.90
10.80
20.38
8.94
11.71
14.90
7.57
11.92
14.76
17.54
15.78
15.80
10.21
10.14
11.38
11.12
13.84
9.25
13.80
17.33
7.32
8.39
21.01
8.46
15.34
12.55
21.09
10.72
9.03
21.59
18.56
14.68
7.84
18.91
11.93

13.28
6.54
17.74
9.90
11.52
7.96
4.06
13.98
17.43
16.42
13.54
14.81
19.70
15.11
16.43
10.72
15.10
23.79
16.25
5.65
12.90
14.77
10.90
20.53
10.29
11.56
14.99
7.88
12.52
15.09
18.62
15.85
17.30
10.22
12.44
13.06
10.99
15.10
9.97
14.62
19.34
8.09
8.80
21.96
7.96
15.13
13.22
20.47
12.42
9.28
21.38
19.02
15.43
8.27
19.11
12.79

UNITED STATES

MARKET

EXISTING
INVENTORY (SF)
MARCH 31, 2009

Atlanta, GA
30,293,000
Bakersfield, CA
670,000
Baltimore, MD
9,204,000
2,038,000
Boise, ID
Boston, MA
39,352,000
Charleston, SC
1,031,000
13,179,000
Charlotte, NC
Chicago, IL
71,229,000
Cincinnati, OH
5,869,000
Cleveland, OH
8,932,000
Columbia, SC
1,896,000
Columbus, OH
4,308,000
Dallas/Fort Worth,TX
22,524,000
Denver, CO
17,328,000
Detroit, MI
11,619,000
Fresno, CA
1,039,000
Ft. Lauderdale/Broward County, FL 4,549,000
Greenville, SC
1,794,000
Hartford, CT
6,337,000
Honolulu, HI
4,700,000
Houston,TX
27,510,000
Indianapolis, IN
6,504,000
Jacksonville, FL
6,602,000
Kansas City MO-KS
6,115,000
Las Vegas, NV
700,000
Little Rock, AR
2,191,000
Los Angeles, CA
14,715,000
Louisville, KY
2,857,000
Memphis,TN
1,901,000
Miami/Dade County, FL
7,702,000
Milwaukee,WI
5,323,000
Minneapolis/St. Paul, MN
1,661,000
Nashville,TN
3,943,000
New York, NY - DT Manhattan 55,574,000
New York, NY - MT Manhattan 162,663,000
New York, NY - MTS Manhattan 14,176,000
Oakland, CA
9,843,000
Orlando, FL
5,681,000
Philadelphia, PA
30,929,000
Phoenix, AZ
9,547,000
Pleasanton/Walnut Creek, CA 12,991,000
Portland, OR
13,611,000
Raleigh/Durham/Chapel Hill, NC 2,704,000
Reno, NV
548,000
Sacramento, CA
8,220,000
San Diego County, CA
6,977,000
San Francisco, CA
51,965,000
San Jose/Silicon Valley, CA
3,047,000
Santa Rosa/Sonoma County, CA
369,000
Seattle/Puget Sound,WA
28,475,000
St. Louis, MO
6,843,000
Stockton/San Joaquin County, CA 2,557,000
Tampa, FL
4,795,000
Washington, DC
72,917,000
W. Palm Beach/Palm Beach County, FL 3,313,000
Total US
853,359,000

ABSORPTION
Q1 2009
(SF)

27,000
0
(87,000)
2,000
(393,000)
5,000
(157,000)
515,000
(5,000)
(164,000)
(25,000)
(5,000)
313,000
(229,000)
(25,000)
(2,000)
83,000
0
(205,000)
(18,000)
(131,000)
(18,000)
73,000
(24,000)
0
155,000
27,000
(4,000)
(62,000)
(90,000)
30,000
32,000
(31,000)
79,000
(1,855,000)
(281,000)
(35,000)
(55,000)
(314,000)
(60,000)
(495,000)
(3,000)
(5,000)
(11,000)
93,000
1,000
399,000
(105,000)
1,000
(475,000)
24,000
(62,000)
(52,000)
(241,000)
3,000
(3,866,000)

DOWNTOWN OFFICE

VACANCY
RATE (%)
DEC. 31, 2008

17.64
5.03
15.61
4.65
9.96
6.44
1.39
12.18
14.12
11.70
8.15
11.86
22.23
13.28
13.26
4.01
18.34
17.61
13.26
10.93
8.12
17.56
14.40
17.43
15.06
15.87
13.20
8.68
20.42
10.70
12.56
101.94
15.64
7.69
9.85
5.80
6.93
17.14
8.34
12.81
17.18
5.43
7.00
14.59
6.73
16.34
12.06
23.59
12.65
9.34
21.64
24.83
15.95
8.36
21.40
11.35

VACANCY
RATE (%)
MARCH 31, 2009

17.56
5.25
16.56
4.56
10.96
5.90
3.30
13.12
14.30
13.54
9.47
13.19
20.85
14.60
13.47
12.47
16.51
17.61
15.47
11.31
8.59
17.80
13.30
17.83
10.54
8.53
13.53
8.84
23.69
11.87
12.00
100.00
18.04
7.54
12.16
7.78
7.28
18.11
9.36
13.43
18.67
6.40
7.17
16.66
5.60
16.33
12.83
25.08
12.40
11.00
21.29
27.25
17.04
8.95
21.32
12.28

CLASS A

AVERAGE ANNUAL
QUOTED RENT (US$PSF)
MARCH 31, 2009

22.60
17.40
25.20
20.70
52.40
30.00
30.70
37.00
23.50
20.60
20.40
23.00
25.80
32.00
22.50
25.80
32.00
21.90
23.80
37.50
38.90
20.30
21.00
20.20
39.30
16.40
39.10
20.70
16.80
42.70
22.00
27.80
19.50
49.70
74.80
52.30
27.20
27.90
25.70
30.40
27.40
25.30
23.20
22.90
34.30
33.80
39.50
40.30
23.40
34.50
20.60
20.20
23.40
50.20
39.70
43.40 (Weighted)
29.70 (Equal)

QUARTERLY ANNUAL
CHANGE
CHANGE
(%)
(%)

(1.35)
0.00
4.31
3.92
(15.32)
7.14
(4.53)
(5.13)
(0.34)
3.62
0.00
0.66
(0.96)
(5.88)
0.72
(2.27)
(1.81)
0.00
0.00
0.37
1.20
(1.51)
0.00
0.95
0.00
3.81
4.15
(3.50)
(0.18)
(3.20)
0.00
2.54
0.15
(12.17)
(8.88)
(11.87)
(19.79)
(1.55)
0.31
(2.41)
0.00
(0.20)
0.65
0.00
0.35
(1.74)
(8.35)
(1.18)
3.17
7.21
0.00
(2.33)
3.95
0.10
(1.07)
(5.47)
(2.46)

1.75
0.00
4.31
7.76
(13.64)
8.11
6.11
(7.50)
0.13
3.57
2.61
3.09
(0.96)
7.93
(9.89)
(6.52)
(2.56)
21.78
(0.17)
2.91
0.93
4.01
5.00
(1.94)
(0.88)
3.81
(2.10)
5.95
(0.30)
(0.02)
0.00
5.14
(4.94)
(14.40)
(22.51)
(15.32)
(19.50)
(2.14)
(34.27)
0.07
(2.15)
3.35
6.78
0.00
(3.70)
(5.37)
(24.29)
13.83
(3.47)
(4.28)
0.00
7.01
(0.81)
(1.18)
1.15
(13.03)
(4.03)

COLLIERS INTERNATIONAL

UNITED STATES

MARKET

EXISTING
INVENTORY (SF)
MARCH 31, 2009

Atlanta, GA
179,044,000
Bakersfield, CA
5,876,000
Baltimore, MD
48,430,000
Boise, ID
10,337,000
Boston, MA
100,011,000
Charleston, SC
7,910,000
Charlotte, NC
54,501,000
Chicago, IL
105,846,000
Cincinnati, OH
19,336,000
Cleveland, OH
71,557,000
4,816,000
Columbia, SC
16,366,000
Columbus, OH
254,780,000
Dallas/Fort Worth,TX
Denver, CO
129,937,000
Detroit, MI
99,826,000
Fairfield, CA
3,572,000
Fresno, CA
17,591,000
Ft. Lauderdale/Broward County, FL 40,950,000
Greenville, SC
4,328,000
Hartford, CT
14,325,000
Honolulu, HI
7,642,000
Houston,TX
153,891,000
Indianapolis, IN
19,877,000
Jacksonville, FL
26,339,000
Kansas City MO-KS
35,743,000
Las Vegas, NV
37,246,000
Little Rock, AR
6,803,000
Los Angeles - Inland Empire, CA
22,913,000
Los Angeles, CA
195,933,000
Louisville, KY
9,632,000
Memphis,TN
27,366,000
Miami/Dade County, FL
51,166,000
Milwaukee,WI
17,809,000
Minneapolis/St. Paul, MN
44,113,000
Nashville,TN
24,826,000
New Jersey - Central
103,965,000
New Jersey - Northern
158,718,000
New York - Fairfield County, CT
57,371,000
New York - Westchester County, NY 44,229,000
Oakland, CA
15,877,000
Orange County, CA
77,207,000
Orlando, FL
51,536,000
Philadelphia, PA
108,763,000
Phoenix, AZ
106,004,000
Pleasanton/Walnut Creek, CA
17,865,000
Portland, OR
41,990,000
Raleigh/Durham/Chapel Hill, NC
40,726,000
Reno, NV
5,349,000
Sacramento, CA
68,747,000
San Diego County, CA
66,225,000
San Francisco Peninsula, CA
33,347,000
San Jose/Silicon Valley, CA
52,569,000
Santa Rosa/Sonoma County, CA
8,495,000
Seattle/Puget Sound,WA
83,473,000
St. Louis, MO
38,673,000
Tampa, FL
70,722,000
Washington, DC - N.Virginia
150,300,000
Washington, DC - Suburban, MD
73,812,000
W. Palm Beach/Palm Beach County, FL 28,619,000
Total US
3,375,217,000

COLLIERS INTERNATIONAL

SUBURBAN OFFICE

NEW
SUPPLY Q1
2009 (SF)

195,000
104,000
25,000
29,000
244,000
0
132,000
0
50,000
39,000
0
0
851,000
468,000
0
0
38,000
184,000
0
0
0
1,651,000
44,000
0
106,000
632,000
90,000
306,000
501,000
0
0
778,000
0
0
35,000
10,000
0
0
0
0
0
316,000
83,000
795,000
0
20,000
(183,000)
0
431,000
421,000
198,000
777,000
0
237,000
361,000
17,000
424,000
238,000
12,000
10,657,000

UNDER
CONSTRUCTION
(SF)

2,706,000
48,000
1,387,000
278,000
651,000
0
162,000
280,000
884,000
212,000
0
930,000
3,575,000
17,000
217,000
0
46,000
435,000
0
0
0
3,567,000
0
0
824,000
611,000
0
455,000
2,124,000
0
148,000
1,655,000
0
430,000
318,000
577,000
231,000
975,000
0
0
81,000
929,000
1,298,000
1,768,000
0
548,000
824,000
0
1,280,000
913,000
0
1,844,000
107,000
7,659,000
1,033,000
710,000
1,590,000
1,549,000
102,000
45,978,000

ALL INVENTORY

ABSORPTION
Q1 2009
(SF)

(154,000)
63,000
(1,057,000)
(93,000)
(784,000)
98,000
(167,000)
(872,000)
(113,000)
(89,000)
0
19,000
847,000
(558,000)
(407,000)
(29,000)
(63,000)
(265,000)
0
(129,000)
(38,000)
(1,057,000)
(75,000)
(414,000)
(177,000)
(331,000)
128,000
(154,000)
(2,620,000)
19,000
(10,000)
(302,000)
11,000
(517,000)
(293,000)
228,000
253,000
(680,000)
(424,000)
(60,000)
(1,121,000)
(229,000)
386,000
(337,000)
(798,000)
(270,000)
(371,000)
(101,000)
(399,000)
(268,000)
(603,000)
(823,000)
(126,000)
116,000
249,000
(506,000)
(521,000)
(424,000)
(204,000)
(16,616,000)

VACANCY
RATE (%)
DEC. 31, 2008

VACANCY
RATE (%)
MARCH 31, 2009

15.59
9.15
16.55
15.94
14.78
21.20
13.38
20.93
21.73
9.90
17.83
14.28
16.03
14.02
18.12
24.50
13.27
13.72
25.94
18.55
7.31
13.65
20.78
14.43
15.59
21.80
13.78
18.40
10.35
16.37
13.11
12.42
16.44
18.71
10.22
15.50
11.32
16.44
15.99
16.47
18.20
13.62
15.43
20.04
14.04
10.33
16.99
18.56
15.76
17.38
16.12
13.62
27.52
10.31
9.15
13.33
9.41
11.02
18.88
14.69

15.71
10.64
18.77
17.08
17.81
19.96
14.76
21.76
22.50
9.98
17.83
14.55
15.98
14.90
18.60
25.30
13.81
14.30
25.94
19.16
7.81
15.34
21.74
16.00
16.33
23.60
11.54
23.29
14.46
16.18
13.14
13.42
16.37
19.88
11.55
15.29
11.17
17.62
16.95
16.86
19.45
14.37
15.14
20.99
14.41
11.00
18.97
21.12
16.87
18.16
18.42
16.77
29.00
10.41
9.36
14.10
10.00
11.49
20.99
15.67

UNITED STATES

MARKET

EXISTING
INVENTORY (SF)
MARCH 31, 2009

Atlanta, GA
76,666,000
2,661,000
Bakersfield, CA
20,510,000
Baltimore, MD
Boise, ID
4,391,000
Boston, MA
28,580,000
Charleston, SC
3,878,000
Charlotte, NC
19,460,000
Chicago, IL
57,134,000
Cincinnati, OH
12,042,000
Cleveland, OH
12,597,000
Columbia, SC
959,000
Columbus, OH
8,884,000
Dallas/Fort Worth,TX
92,733,000
Denver, CO
38,036,000
Detroit, MI
27,661,000
Fairfield, CA
2,157,000
Fresno, CA
3,764,000
Ft. Lauderdale/Broward County, FL 9,849,000
Greenville, SC
1,812,000
Hartford, CT
8,139,000
Houston,TX
64,929,000
Indianapolis, IN
9,961,000
Jacksonville, FL
9,410,000
Kansas City MO-KS
10,953,000
Las Vegas, NV
4,797,000
Little Rock, AR
1,733,000
Los Angeles - Inland Empire, CA 4,936,000
Los Angeles, CA
97,852,000
Louisville, KY
5,394,000
Memphis,TN
6,964,000
Miami/Dade County, FL
12,480,000
Milwaukee,WI
5,974,000
Minneapolis/St. Paul, MN
16,733,000
Nashville,TN
15,555,000
New Jersey - Central
61,418,000
New Jersey - Northern
89,908,000
New York - Fairfield County, CT 31,271,000
NewYork - Westchester County, NY 25,108,000
Oakland, CA
13,425,000
Orange County, CA
32,256,000
Orlando, FL
14,595,000
Philadelphia, PA
66,537,000
Phoenix, AZ
32,660,000
Pleasanton/Walnut Creek, CA
9,802,000
Portland, OR
11,437,000
Raleigh/Durham/Chapel Hill, NC 24,560,000
Reno, NV
2,881,000
Sacramento, CA
14,606,000
San Diego County, CA
23,352,000
San Francisco Peninsula, CA
21,643,000
San Jose/Silicon Valley, CA
24,003,000
Santa Rosa/Sonoma County, CA 3,170,000
Seattle/Puget Sound,WA
22,564,000
St. Louis, MO
24,000,000
Tampa, FL
23,642,000
Washington, DC - N.Virginia
98,511,000
Washington, DC - Suburban, MD 38,386,000
W. Palm Beach/Palm Beach County, FL 8,403,000
Total US
1,417,716,000

ABSORPTION
Q1 2009
(SF)

110,000
67,000
(518,000)
(34,000)
(337,000)
128,000
(130,000)
(583,000)
(38,000)
49,000
0
3,000
558,000
(38,000)
(171,000)
(20,000)
(6,000)
(72,000)
0
(128,000)
(193,000)
(81,000)
(480,000)
(6,000)
(142,000)
110,000
(61,000)
(1,525,000)
41,000
(70,000)
(146,000)
85,000
(386,000)
(169,000)
418,000
536,000
(462,000)
(260,000)
(24,000)
(413,000)
(275,000)
423,000
131,000
39,000
(110,000)
32,000
(67,000)
(122,000)
(14,000)
(340,000)
(354,000)
(15,000)
42,000
200,000
(209,000)
353,000
(116,000)
274,000
(4,516,000)

SUBURBAN OFFICE

CLASS A

VACANCY
RATE (%)
DEC. 31, 2008

VACANCY
RATE (%)
MARCH 31, 2009

16.14
6.90
18.67
16.99
16.06
19.74
18.01
21.73
19.52
10.73
13.46
9.14
15.83
15.38
15.73
26.49
23.68
18.58
14.20
16.48
12.93
20.34
12.00
14.83
30.06
16.00
27.30
11.76
15.93
6.79
14.71
12.39
13.15
9.74
15.54
14.52
18.49
18.31
9.15
20.88
13.92
14.73
23.99
12.36
8.72
15.10
19.67
20.19
22.04
15.66
13.79
33.29
8.42
7.04
15.20
12.96
13.01
20.92
15.37

16.10
7.20
21.20
18.32
18.23
16.44
19.92
22.75
20.43
10.34
13.46
9.09
15.66
16.10
16.57
27.44
24.09
18.97
14.20
17.54
15.04
22.36
17.10
15.71
34.75
9.51
33.30
13.66
15.17
7.79
17.23
10.97
15.46
10.84
14.86
14.00
19.97
19.34
9.33
21.43
16.10
14.20
25.75
11.96
15.79
16.77
23.95
22.67
23.39
17.84
19.11
33.75
16.07
7.60
16.15
13.31
14.85
21.92
16.45

AVERAGE ANNUAL
QUOTED RENT (US$PSF)
MARCH 31, 2009

22.80
24.00
26.00
18.30
30.20
26.50
20.10
28.00
21.10
21.20
17.70
19.30
25.80
24.50
23.70
21.60
26.40
28.00
18.80
21.10
27.90
19.50
21.00
22.70
36.20
18.30
28.00
37.10
17.60
21.80
28.30
21.00
27.80
22.00
26.20
28.70
33.80
28.10
28.20
32.30
23.70
24.80
27.80
24.00
24.30
22.20
22.80
26.50
37.10
36.00
40.40
24.70
27.00
25.00
24.80
29.80
29.70
31.50
27.70 (Weighted)
25.70 (Equal)

QUARTERLY ANNUAL
CHANGE
CHANGE
(%)
(%)

(1.56)
0.00
(0.31)
(3.43)
(5.86)
26.19
0.10
16.67
2.88
0.33
0.00
(0.46)
(0.96)
(2.00)
(0.46)
(14.98)
(2.22)
(10.90)
1.07
(0.14)
(0.11)
1.40
0.00
0.26
(1.52)
0.00
(2.10)
(2.44)
(9.66)
1.73
(18.41)
(30.81)
(0.64)
(2.10)
(3.46)
(1.24)
7.64
(1.06)
(11.60)
(8.87)
(1.78)
(0.92)
(6.11)
(0.99)
(1.10)
(0.81)
0.00
5.24
(3.13)
(8.26)
(2.60)
0.00
34.93
(3.85)
2.27
7.63
(2.46)
(4.17)
(1.41)
(1.84)

(4.29)
0.00
0.82
(3.99)
(0.20)
3.92
0.45
0.72
2.78
0.48
4.67
(0.26)
(4.63)
4.26
(1.29)

(4.35)
(6.68)
4.61
0.29
1.90
(0.31)
2.44
1.02
(2.66)
0.00

(7.96)
(12.10)
2.01
(15.32)
0.00
4.99
(0.72)
(3.53)
(1.71)
2.58
(6.36)
(7.48)
(13.28)
(12.75)
0.61
(12.74)
(10.71)
1.42
0.36
(5.00)
(2.64)
(4.04)
(17.13)
(2.88)
(0.96)
(2.06)
4.17
1.27
(10.01)
1.16
5.32
(3.81)
(3.04)

COLLIERS INTERNATIONAL

UNITED STATES

OFFICE

INVESTMENT

UNITED STATES OFFICE INVESTMENT

MARKET

CBD
CBD
SUBURBAN SUBURBAN
SALES PRICE CAP RATE SALES PRICE CAP RATE
(US$PSF)
(%)
(US$PSF)
(%)

Atlanta, GA
178.00
Bakersfield, CA
170.00
Baltimore, MD
200.00
Boise, ID
151.00
Boston, MA
245.00
Charleston, SC
275.00
Charlotte, NC
275.00
Chicago, IL
161.00
Cincinnati, OH
65.00
Cleveland, OH
115.00
Dallas/Fort Worth,TX

Denver, CO
225.00
Fresno, CA
185.00
Ft. Lauderdale/Broward County, FL

Greenville, SC
166.00
Houston,TX
140.00
Jacksonville, FL
115.00
Kansas City MO-KS
245.00
Las Vegas, NV

Little Rock, AR
78.50
Los Angeles - Inland Empire, CA

Los Angeles, CA
282.00
Miami/Dade County, FL
345.00
Milwaukee,WI
225.00
Minneapolis/St. Paul, MN
175.00
Nashville,TN
176.50
New Jersey - Central

New Jersey - Northern

New York - Fairfield County, CT

New York - Westchester County, NY

New York, NY - DT Manhattan

300.00
New York, NY - MT Manhattan 390.00
New York, NY - MTS Manhattan 300.00
Oakland, CA
250.00
Orange County, CA

Orlando, FL
185.00
Philadelphia, PA
144.00
Phoenix, AZ
185.00
Pleasanton/Walnut Creek, CA
311.00
Portland, OR
126.56
Raleigh/Durham/Chapel Hill, NC

Reno, NV
150.00
Sacramento, CA
250.00
San Diego County, CA
208.93
San Francisco Peninsula, CA

San Francisco, CA
330.69
San Jose/Silicon Valley, CA

Santa Rosa/Sonoma County, CA

St. Louis, MO
100.00
Stockton/San Joaquin County, CA 160.00
Tampa, FL
150.00
Washington, DC
401.00
Washington, DC - Suburban, MD

W. Palm Beach/Palm Beach County, FL

Total US
208.59

COLLIERS INTERNATIONAL

7.40

8.50
7.60
7.00
8.00
7.00
7.50

10.00

8.50
8.50

8.00
8.00
9.00
9.00

9.00

5.00
6.50
8.00
8.00
8.25

8.00
6.00
8.00
8.00

9.00
8.00
7.80
8.10
7.58

8.00
7.75

9.75
8.75
9.00
7.50

8.00

170.00

175.00
151.00
180.00
170.00
120.00
112.00
50.00
115.00
121.00
125.00
202.50
147.71
138.00
100.00
135.00
150.00
270.00
127.78
187.00
300.00
227.95
180.00
165.00
188.24
175.00
180.00
275.00
200.00

200.00
285.00
175.00
170.00
126.51
285.00
199.68
125.00
205.00
218.00
246.42
390.00

280.00
243.10
100.00

145.00

280.00
183.02
185.00

7.90

9.00
7.60

9.00
7.75
8.20

9.50
9.00
9.25
8.00
8.52
8.50
9.60
9.00
10.00
8.00
9.00
5.90
6.10
7.29
8.00
8.50
7.25
7.50
7.50
8.00
8.00

8.00
6.30
9.50
8.00
7.50
6.10
7.04
9.25
7.75
7.25
7.75
5.50

10.70
6.40
10.50

9.00

6.60
7.66
8.06

U.S. Office Space Market Posts Weakest

Quarter Since Q3 2001 (Continued from page 1)
Wilting demand pushing rents lower. For the second
consecutive quarter, downtown lease rates dropped
substantially during the quarter with Q1 asking rents
dipping by 5.5% to $43.36 per square foot. Markets such as
Manhattan, Boston and San Francisco contributed largely
to the unusually large drop but nonetheless the national
trend is clearly down (see unweighted rent on page 3).
Suburban asking rents also fell during the quarter, declining
by 1.4% to $27.69 per square foot. On an annual basis this
left CBD rents down 13.0% and suburban rents down 3.8%.
Office construction falls to a two year low. First quarter
office completions dropped considerably relative to the prior
quarter with new construction totaling 15.4 MSF compared
with 18.6 MSF in Q4. This was also a modest decline from
the first quarter of 2008 when construction registered 17.4
MSF. Construction activity also registered a substantial
decline with Q1 under construction activity falling by 10.4
MSF to total 83.8 MSF. Construction activity is expected
to drop-off sharply in the coming quarters leaving the
development pipeline below levels witnessed in early 2005
when just 40 MSF of office development was underway.
Ross J. Moore
Executive Vice President, Market and Economic Research
Colliers International USA, ross.moore@colliers.com

GLOSSARY
Inventory Includes all existing multi or single tenant leased and
owner-occupied office properties greater than or equal to 10,000
square feet (net rentable area). In some larger markets this
minimum size threshold may vary up to 50,000 square feet.
Does not include medical or government buildings.
Vacancy Rate Percentage of total inventory physically vacant as
at the survey date including direct vacant and sublease space.
Absorption Net change in physically occupied space over a given
period of time.
New Supply Includes completed speculative and build-tosuit construction. New supply quoted on a net basis after any
demolitions or conversions.
Annual Quoted Rent Includes all costs associated with
occupying a full floor in the mid-rise portion of a Class A building
inclusive of taxes, insurance, maintenance, janitorial and utilities
(electricity surcharges added where applicable). All office rents in
this report are quoted on an annual, gross per square foot basis.
Rent calculations do not include sublease space.
Cap Rate (Or going-in cap rate) Capitalization rates in this
survey are based on multi-tenant institutional grade buildings fully
leased at market rents. Cap rates are calculated by dividing net
operating income (NOI) by purchase price.
Note: SF=Square Feet
PSF=Per Square Foot
CBD=Central Business District

COLLIERS INTERNATIONAL

NORTH AMERICAN HIGHLIGHTS

FIRST QUARTER 2009

Colliers Office Locations

278 OFFICES WORLDWIDE

Colliers International is a corporation of leading real estate firms committed to delivering

consistently superior commercial real estate services, wherever, and whenever needed.

127

Global $2.0 Billion in Revenue

868 Million SF Under Management
11,000 Employees

62 Countries
6 Continents

90
61

Americas
94 United States
17 Canada
16 Latin America
Europe, Middle East & Africa
Asia Pacific

62 COUNTRIES
ON 6 CONTINENTS

HAWAII

SOUTH
AMERICA

NORTH AMERICA

ASIA
PACIFIC

EUROPE AND
MIDDLE EAST

AFRICA

AUSTRALIA

Albania
Argentina
Australia
Austria
Belarus
Belgium
Brazil
Bulgaria
Canada
Chile
China
Colombia
Costa Rica
Croatia
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hong Kong
Hungary
India
Indonesia
Ireland
Israel
Italy
Japan
Latvia
Lithuania

Macau
Mexico
Montenegro
Netherlands
New Zealand
Norway
Pakistan
Per
Philippines
Poland
Portugal
Qatar
Romania
Russia
Saudi Arabia
Serbia
Singapore
Slovak Republic
South Africa
South Korea
Spain
Sweden
Switzerland
Taiwan
Thailand
Turkey
UAE
Ukraine
United Kingdom
U.S.A.
Vietnam

Office Locations

Colliers International
50 Milk Street, 20th Floor
Boston, MA 02109 USA
Tel: (617) 722-0221
Fax: (617) 722-0224

The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been
made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged
to consult their professional advisors prior to acting on any of the material contained in this report.

www.colliers.com
COLLIERS INTERNATIONAL