Office Vacancies, Rents Increase

The Real Deal is pointing out an increase in office vacancies downtown, all while asking prices on leases grow. For months the downtown office market had been tightening. By February, occupancy rates surpassed midtown for the first time since 2001, leading us to speculate the tightening market could lead to new office construction along Jersey City's waterfront. Yet now, with increasing availability, even if not decreasing prices, new construction in secondary markets seems unlikely.

Meanwhile, workers at ground zero continue to plug away on millions of square feet of office space, becoming available starting in 2011. The creation of new spaces at the World Center site while neighboring towers increase vacancy rates means a likely glut of office space. In addition, the nation's economy continues to shed jobs, meaning less space is needed.