Empty offices are on the rise

[Joseph Burkeson, CMI]

More news...

Empty offices are on the rise


ASSOCIATED PRESS


Stock analysts say commercial real estate is the next ticking time bomb for banks. Big banks -- like Bank of America, JPMorgan Chase and Morgan Stanley -- each hold tens of billions of dollars in commercial real estate securities. The banks also invested directly in properties.



By CHARLES V. BAGLI THE NEW YORK TIMES


Published: Tuesday, January 6, 2009 at 1:00 a.m.
Last Modified: Tuesday, January 6, 2009 at 8:11 a.m.

Vacancy rates in office buildings exceed 10 percent in virtually every major city in the country and are rising rapidly, a sign of economic distress that could lead to yet another wave of problems for troubled lenders.

With job cuts rampant and businesses retrenching, more empty space is expected from New York to Chicago to Los Angeles in the coming year. Rental income would then decline, and property values would slide further. The Urban Land Institute predicts 2009 will be the worst year for the commercial real estate market "since the wrenching 1991-1992 industry depression."

Exercpt: http://www.heraldtribune.com/article.../2107/BUSINESS

[Dale Duffy]

Could have fooled me---

I have not done a commercial inspection in a month...but a realtor called yesterday and wanted to know how much I would charge to inspect such and such address....hmmm...I just inspected that a couple months ago...so I give him a cheap price, figure the most it could take with the report in my hand 2-3 hours.....I told him $1339.00......OH MY GOD, THAT IS WAY TO HIGH, he says----

This is 18,000 sq ft now---

I guess he got somebody else to do it from scratch for less if you can imagine that....I think I charged $3,779.00 the first time, major systems and components only, I was in and out of there in 6 hrs. the first time.

[Bruce A. King]

Dale,

six hours on site, plus 3 report plus travel etc looks like you made over $300 per hour the first time....

I wish the market would allow that here, home inspection fees are not too bad here compared to many cities but commercial is either not inspected or probably done cheap. I loose most all commercial jobs due to price.

[Scott Gilligan, CMI]

Originally Posted by dduffy

Could have fooled me---

I have not done a commercial inspection in a month...but a realtor called yesterday and wanted to know how much I would charge to inspect such and such address....hmmm...I just inspected that a couple months ago...so I give him a cheap price, figure the most it could take with the report in my hand 2-3 hours.....I told him $1339.00......OH MY GOD, THAT IS WAY TO HIGH, he says----

This is 18,000 sq ft now---

I guess he got somebody else to do it from scratch for less if you can imagine that....I think I charged $3,779.00 the first time, major systems and components only, I was in and out of there in 6 hrs. the first time.

I have a bid in for a condominium complex with 33 units. They are thinking they only want about 8 units inspected. I quoted them a little under $8,000 for that and they seemed to like the numbers. My proposal went to the PMG today for approval.

Got another call this morning to inspect a take out diner with a ling space over it. That is about $3,500 square feet and they do not want the cooking equipment inspected, just structural and utilities. Quoted $550.00 for that one and will be doing it early next week.

Commercial work isn't completely dead, but it sure has slowed down considerably since last summer.

[Dale Duffy]

Bruce & Scott, it has come to a stand still here, there are more businesses going OUT of business, then moving, expanding, or simply starting a new venture.

[Paul Pendley]

Same in CA...although I did do a quote for a 22 unit apartment complex last week, and a strip mall Monday. neither have responded to my proposal. I guess they got Joe the inspector to do it cheaper. What a shame.

[Joseph A. Ferry]

Originally Posted by NY Times

Vacancy rates in office buildings exceed 10 percent in virtually every major city in the country and are rising rapidly, a sign of economic distress that could lead to yet another wave of problems for troubled lenders.

A ten percent vacancy rate is not unusual or a cause for alarm. A vacancy rate below ten percent means the rents are not high enough.

Class A office space does not get built on spec. There have to be concrete major tenants for 90 % of the space in order to get financing.

The NY Times and its fellow travelers love gloom and doom stories, the better to advance their anti-capitalist socialist agenda.

[gbeaumont]

Originally Posted by dduffy

Bruce & Scott, it has come to a stand still here, there are more businesses going OUT of business, then moving, expanding, or simply starting a new venture.

Same here, can't believe the amount of available space, in particular: retail space most strip malls have major spaces for let, Auto dealers, new and used folding like cheap magazines on Route 19 (our major throughfare), even hotels and motels are going dark in my area.

I'm told that tourism is down as much as 50% this year.

It ain't good

Gerry

[Carla Horne]

Hey Joe,
are you the happy police or what?
you always seem to be commenting on neg. things
just an observation.
Carla

[Joseph Burkeson, CMI]

Originally Posted by chorne

Hey Joe,
are you the happy police or what?
you always seem to be commenting on neg. things
just an observation.
Carla

Just looking out your window and this is what I observe, must be nice to own rose colored glasses.

[Joseph Burkeson, CMI]

Originally Posted by gbeaumont

Same here, can't believe the amount of available space, in particular: retail space most strip malls have major spaces for let, Auto dealers, new and used folding like cheap magazines on Route 19 (our major throughfare), even hotels and motels are going dark in my area.

I'm told that tourism is down as much as 50% this year.

It ain't good

Gerry

10% empty retail space is an anathema to mall owners, people stop shopping at that level.