Posted by: BayAreaComRE | February 17, 2010

Winter 2009 – Vacancy & Rental Rates Across the Globe

Our very own Cushman & Wakefield Research Group has compiled the key statistics for major business markets around the world. The publication is known as the “Marketbeat- Across the Globe” and stacks over a hundred different cities and regions against each other.

The two main metrics used are overall class A vacancy rates and direct class A asking rental rates. Direct asking rental rates are used because they are a more “raw” indication of what the market is doing. Sublease space typically operates in a different world as far as pricing is concerned because the operators have many different constraints than a typical real estate investor / owner, therefore using the direct space as a pricing metric is a more consistent way to gauge the health of a local market.

Also, it is necessary to use asking rates versus “taking” or lease rates because commercial real estate is an inefficient market and due to confidentiality and a general lag of information, the contract rates for most leases don’t become available in a timely manner to provide for a consistent statistical analysis. Therefore, the asking rates or marketed rates for class A assets are used instead to provide our clients with uniform distribution of data. For vacancy, both direct and sublease space is included (a.k.a overall) because the sum of the two components shows the true health of a market and what is truly available or not occupied.

For vacancy, on a global perspective from lowest to highest, San Francisco is in the middle of the pack, Oakland is in the 75th percentile, and Silicon Valley is near the top.

For asking rental rates, from highest to lowest, San Francisco is in the top 40, Silicon Valley is in the middle, and Oakland is in the lower third.

A lot of time and energy is put into “scrubbing” these numbers through an exhausting audit process every quarter. The result is a backlog of trends and stats spanning decades. This puts C&W as true leader for objective commercial property intelligence.

For the full report, click on the image below.

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