Office Vacancy Rates Edge Up, Reverse Trend

New York, NY, January 8, 2008--The national vacancy rate for office buildings rose in the fourth quarter for the first time in four years.

Demand for commercial buildings has started to decline in markets such as Orange County, Calif., and Las Vegas, that have been particularly hard hit by problems in the housing and mortgage industries.

Nationally, the office vacancy rate in 79 metropolitan markets rose to 12.6% at the end of the fourth quarter from 12.5% at the end of the third quarter, according to Reis Inc., a New York real-estate research firm.

Though the vacancy-rate increase is small it comes after 16 consecutive quarterly declines.

Even as tenants began to pull back on leasing in the fourth quarter, developers added more space to the market. More than 19 million square feet of new office space was completed -- the most since the fourth quarter of 2000, at the height of the last boom.

However, landlords were able to raise rents in Boston, Denver and New York City.