North American Office Highlights 1Q 2011

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  • 1. Q1 2011 | OFFICENORTH AMERICAHIGHLIGHTS U.S. Office Market Begins the Year on a Soft Note ROSS J. MOORE Chief Economist | USAMARKET INDICATORSRelative to prior period The U.S. office market began the year on a more muted note with only a modest increase in occupied space and little change in vacancy. Rents continued to languish, but for the first time in three years Q1 Q2 2011 2011* both downtown and suburban rents managed to eke out small gains. With the economy not yet firing on all cylinders and total employment showing only lackluster growth, the outlook for the office space VACANCY market is far from certain. Higher energy costs are starting to impact business decisions and, as a result, demand for office space. By comparison, Canadian markets enjoyed a reasonably good quarter NET ABSORPTION on the back of robust economic growth and a healthy labor market. Both U.S. and Canadian econo- CONSTRUCTION mies are expected to make gains in 2011, but the sudden surge in energy prices is a fairly stiff headwind that is likely to put a damper on corporate expansion and add to inflation concerns. RENTAL RATE First-quarter data confirms our view that the U.S. office market recovery will be uneven in nature and *Projected fairly volatile. Manhattan, Washington, San Francisco and Boston remain the clear leaders in terms of fundamentals; yet Dallas, Denver, Houston, Northern New Jersey, Philadelphia, Raleigh, San Diego, San Jose, Seattle and West Los Angeles all showing encouraging signs. Also somewhat positive is the thirteen-month-long gain in private-sector employment. Furthermore, office-using employment wasU.S. OFFICE MARKET reasonably strong during the January-March period, with professional and businesses employment inSUMMARY STATISTICS, Q1 2011 particular up 3.2% year-over-year (March). Widespread increases in rents are unlikely to occur in 2011Vacancy Rate: 15.46% continued on page 6 Change from Q4 2010: –0.01 U.S. OFFICE MARKET Q1 2009 – Q1 2011Absorption:8.1 Million Square Feet 35 15.8 U.S. office market 15.6 took a breather in Q1,New Construction: 25 but all signs suggest Million Square Feet 15.47.5 Million Square Feet 15 15.2 the recovery begun Vacancy (%) 5 15.0 last year will onlyUnder Construction: 14.8 accelerate in the25.7 Million Square Feet -5 14.6 coming quarters. -15 14.4Asking Rents Per Square Foot 14.2 (Change from Q4 2010): -25 14.0Downtown Class A: $39.55 (0.7%) -35 13.8Suburban Class A: $26.20 (0.6%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2009 2010 2011 Absorption Completions VacancyWWW.COLLIERS.COM
  • 2. HIGHLIGHTS | Q1 2011 | OFFICE | NORTH AMERICA UNITED STATES | DOWNTOWN OFFICE | ALL INVENTORY EXISTING NEW SUPPLY UNDER VACANCY VACANCY ABSORPTION INVENTORY (SF) Q1 2011 CONSTRUCTION RATE (%) RATE (%) Q1 2011 MARKET MAR. 31, 2011 (SF) (SF) DEC. 31, 2010 MAR. 31, 2011 (SF) NORTHEAST Baltimore, MD 21,677,000 0 0 16.6 15.6 143,000 Boston, MA 60,163,000 0 760,000 16.6 16.6 (35,000) Hartford, CT 9,626,000 0 180,000 22.9 22.8 9,000 New York, NY – Downtown Manhattan 109,357,000 0 4,707,000 14.2 14.1 165,000 New York, NY – Midtown Manhattan 228,627,000 0 1,876,000 12.3 12.3 (100,000) New York, NY – Midtown S. Manhattan 167,392,000 0 0 9.6 9.4 197,000 Philadelphia, PA 42,672,000 0 0 12.4 12.1 115,000 Stamford, CT 18,854,000 260,000 0 18.3 19.0 96,000 Washington, DC 141,797,000 573,000 799,000 11.1 11.1 659,000 White Plains, NY 7,845,000 0 0 13.7 13.2 38,000 NORTHEAST TOTAL/AVERAGE 808,009,000 833,000 8,323,000 12.49 12.42 1,288,000 SOUTH Atlanta, GA 48,560,000 0 0 17.1 18.1 (449,000) Charleston, SC 1,995,000 0 0 10.0 10.2 (4,000) Charlotte, NC 22,510,000 0 0 13.0 11.1 399,000 Columbia, SC 4,986,000 0 0 23.5 22.0 46,000 Dallas/Fort Worth, TX 45,961,000 0 0 22.6 22.5 56,000 Ft. Lauderdale/Broward Co., FL 8,274,000 0 0 15.7 16.1 (32,000) Greenville, SC 3,125,000 0 0 18.9 18.0 21,000 Houston, TX 37,666,000 972,000 845,000 15.4 16.0 (13,000) Jacksonville, FL 16,211,000 0 0 13.8 13.6 13,000 Little Rock, AR 6,577,000 0 0 14.5 14.5 0 Louisville, KY 16,076,000 0 60,000 10.3 10.4 (20,000) Memphis, TN 8,338,000 0 0 16.5 16.4 7,000 Miami-Dade, FL 17,427,000 0 615,000 21.3 21.0 52,000 Nashville, TN 7,857,000 0 44,000 23.3 22.2 61,000 Orlando, FL 12,522,000 105,000 0 13.6 13.1 153,000 Raleigh/Durham/Chapel Hill, NC 11,632,000 0 324,000 6.2 6.4 22,000 Tampa, FL 8,565,000 0 0 15.7 14.9 72,000 West Palm Beach/Palm Beach Co., FL 10,053,000 0 0 19.4 19.6 (20,000) SOUTH TOTAL/AVERAGE 288,334,000 1,077,000 1,888,000 16.72 16.67 363,000P. 2 | COLLIERS INTERNATIONAL
  • 3. HIGHLIGHTS | Q1 2011 | OFFICE | NORTH AMERICAUNITED STATES | DOWNTOWN OFFICE | ALL INVENTORY EXISTING NEW SUPPLY UNDER VACANCY VACANCY ABSORPTION INVENTORY (SF) Q1 2011 CONSTRUCTION RATE (%) RATE (%) Q1 2011MARKET MAR. 31, 2011 (SF) (SF) DEC. 31, 2010 MAR. 31, 2011 (SF)MIDWESTChicago, IL 158,223,000 0 0 14.9 14.9 73,000Cincinnati, OH 19,342,000 805,000 0 11.4 19.2 (109,000)Cleveland, OH 34,785,000 0 475,000 18.7 19.3 (267,000)Columbus, OH 19,091,000 0 0 11.9 11.6 58,000Detroit, MI 30,910,000 0 0 16.8 17.1 37,000Grand Rapids, MI 5,498,000 0 0 24.3 24.2 7,000Indianapolis, IN 24,046,000 0 0 10.3 10.8 (112,000)Kansas City, MO-KS 33,224,000 0 0 14.2 13.4 256,000St. Louis, MO 30,010,000 0 0 15.6 15.9 (91,000)MIDWEST TOTAL/AVERAGE 355,129,000 805,000 475,000 14.93 15.38 (148,000)WESTBakersfield, CA 2,952,000 0 0 10.0 9.8 3,000Boise, ID 3,473,000 0 0 11.9 11.7 8,000Denver, CO 31,037,000 30,000 270,000 14.0 13.9 44,000Fresno, CA 3,263,000 0 0 11.4 12.1 (23,000)Honolulu, HI 8,074,000 0 0 12.3 12.1 17,000Las Vegas, NV 3,847,000 0 300,000 12.9 12.9 4,000Los Angeles, CA 33,368,000 0 0 17.3 17.4 (62,000)Oakland, CA 16,892,000 0 0 12.2 11.2 155,000Phoenix, AZ 19,473,000 0 0 21.1 22.1 (214,028)Pleasanton/Walnut Creek, CA 12,110,000 0 0 16.9 17.3 (42,000)Portland, OR 20,173,000 0 0 9.1 9.2 (11,000)Reno, NV 1,327,000 0 0 26.3 28.8 (34,000)Sacramento, CA 18,286,000 0 155,000 9.9 10.2 57,000San Diego County, CA 10,225,000 0 0 19.3 20.8 (115,000)San Francisco, CA 85,635,000 0 288,000 14.7 14.2 487,000San Jose/Silicon Valley, CA 7,593,000 0 0 22.0 25.3 (135,000)Seattle/Puget Sound, WA 58,776,000 762,000 931,000 15.0 15.2 518,000Stockton/San Joaquin County, CA 8,345,000 0 0 18.5 19.5 (83,000)WEST TOTAL/AVERAGE 344,849,000 792,000 1,944,000 14.92 15.03 620,000U.S. TOTAL/AVERAGE 1,796,321,000 3,508,000 12,629,000 14.12 14.19 2,123,000 COLLIERS INTERNATIONAL | P. 3
  • 4. HIGHLIGHTS | Q1 2011 | OFFICE | NORTH AMERICA UNITED STATES | DOWNTOWN OFFICE | CLASS A AVERAGE ANNUAL QUARTERLY ANNUAL EXISTING VACANCY VACANCY ABSORPTION QUOTED RENT CHANGE IN CHANGE IN INVENTORY (SF) RATE (%) RATE (%) Q1 2011 (USD PDF) RENT RENT MARKET MAR. 31, 2011 DEC. 31, 2010 MAR. 31, 2011 (SF) MAR. 31, 2011 (%) (%) NORTHEAST Baltimore, MD 9,811,000 18.0 16.4 157,000 25.20 9.7 3.2 Boston, MA 41,168,000 15.7 16.0 (127,000) 45.90 -0.3 -1.9 Hartford, CT 6,369,000 22.7 22.5 4,000 23.00 -0.1 -1.6 New York, NY – Downtown Manhattan 75,928,000 15.7 15.2 407,000 38.50 -3.0 -3.2 New York, NY – Midtown Manhattan 193,066,000 12.9 13.1 (330,000) 63.40 -2.6 -0.7 New York, NY – Midtown S. Manhattan 33,457,000 11.4 9.6 603,000 47.30 9.5 14.8 Philadelphia, PA 32,830,000 12.2 11.8 106,000 26.10 0.0 0.2 Stamford, CT 13,177,000 19.7 20.4 116,000 38.60 1.7 4.2 Washington, DC 83,401,000 13.9 13.7 776,000 52.90 -1.2 3.7 White Plains, NY 4,958,000 15.4 15.1 (6,000) 30.00 5.4 2.7 NORTHEAST TOTAL/AVERAGE 494,165,000 14.02 13.84 1,708,000 50.48 SOUTH Atlanta, GA 29,639,000 20.4 19.4 285,000 22.70 6.2 5.7 Charleston, SC 1,102,000 9.3 7.6 19,000 28.80 0.1 20.4 Charlotte, NC 16,587,000 14.7 12.5 402,000 24.00 -3.9 -12.2 Columbia, SC 2,194,000 14.1 12.7 2,000 19.50 -1.6 1.4 Dallas/Fort Worth, TX 28,005,000 19.4 19.4 (4,000) 25.30 0.2 -0.4 Ft. Lauderdale/Broward Co., FL 4,464,000 22.7 23.1 (20,000) 32.10 1.1 -1.8 Greenville, SC 1,844,000 8.8 7.9 7,000 20.50 5.3 1.3 Houston, TX 26,814,000 11.1 12.6 (34,000) 34.20 -1.2 -3.9 Jacksonville, FL 6,654,000 15.2 15.0 12,000 18.90 0.1 -6.5 Little Rock, AR 2,636,000 11.5 11.4 3,000 16.60 0.6 0.6 Louisville, KY 3,880,000 10.3 9.0 52,000 20.40 -8.5 -11.0 Memphis, TN 1,938,000 18.1 17.2 18,000 17.40 -1.5 2.0 Miami-Dade, FL 8,770,000 24.5 23.3 105,000 41.40 -0.2 -2.0 Nashville, TN 3,845,000 24.8 22.9 52,000 22.70 -4.3 0.8 Orlando, FL 5,674,000 17.5 16.4 147,000 23.00 -4.1 -6.4 Raleigh/Durham/Chapel Hill, NC 4,733,000 7.8 8.1 (17,000) 24.10 3.8 1.3 Tampa, FL 4,809,000 17.2 15.4 90,000 22.50 -1.7 -1.1 West Palm Beach/Palm Beach Co., FL 3,364,000 23.9 24.3 (14,000) 36.90 0.8 -3.9 SOUTH TOTAL/AVERAGE 156,952,000 17.01 16.54 1,105,000 26.52P. 4 | COLLIERS INTERNATIONAL
  • 5. HIGHLIGHTS | Q1 2011 | OFFICE | NORTH AMERICAUNITED STATES | DOWNTOWN OFFICE | CLASS A AVERAGE ANNUAL QUARTERLY ANNUAL EXISTING VACANCY VACANCY ABSORPTION QUOTED RENT CHANGE IN CHANGE IN INVENTORY (SF) RATE (%) RATE (%) Q1 2011 (USD PDF) RENT RENTMARKET MAR. 31, 2011 DEC. 31, 2010 MAR. 31, 2011 (SF) MAR. 31, 2011 (%) (%)MIDWESTChicago, IL 57,355,000 16.1 16.1 0 32.50 1.6 1.6Cincinnati, OH 8,867,000 14.2 23.4 (38,000) 21.30 -2.5 -2.0Cleveland, OH 9,728,000 13.1 13.7 (65,000) 21.10 3.4 2.2Columbus, OH 7,840,000 13.1 13.0 5,000 19.30 -0.3 -6.6Detroit, MI 11,613,000 17.4 17.1 1,000 23.00 0.0 1.1Grand Rapids, MI 1,567,000 18.6 18.3 5,000 20.90 -4.7 -2.3Indianapolis, IN 10,109,000 12.5 13.1 (59,000) 19.20 0.0 –Kansas City, MO-KS 10,403,000 19.7 17.6 219,000 19.60 14.5 -5.1St. Louis, MO 12,841,000 11.5 11.4 15,000 18.60 5.2 -4.4MIDWEST TOTAL/AVERAGE 130,323,000 15.26 15.77 83,000 25.67WESTBakersfield, CA 670,000 6.3 6.3 0 17.40 0.0 0.0Boise, ID 2,038,000 5.1 4.7 9,000 18.00 0.0 0.0Denver, CO 19,195,000 13.1 12.6 92,000 27.00 0.1 0.1Fresno, CA 1,039,000 9.6 11.8 (23,000) 24.60 0.0 0.0Honolulu, HI 4,709,000 12.2 12.6 (18,000) 35.10 -0.7 -1.1Las Vegas, NV 794,000 8.9 9.1 0 34.80 0.7 2.6Los Angeles, CA 17,734,000 14.7 14.2 95,000 38.50 -1.2 -0.9Oakland, CA 10,198,000 10.0 9.9 2,000 31.20 1.2 2.0Phoenix, AZ 9,470,000 21.9 23.1 (118,000) 27.20 -3.6 1.3Pleasanton/Walnut Creek, CA 7,787,000 18.8 19.0 (13,000) 27.60 5.0 8.5Portland, OR 9,954,000 7.9 6.9 105,000 25.40 3.0 4.1Reno, NV 548,000 19.7 22.3 (14,000) 23.40 0.0 -2.5Sacramento, CA 8,912,000 9.4 9.5 (8,000) 32.20 -1.8 -5.7San Diego County, CA 7,254,000 16.3 18.3 (85,000) 28.70 0.0 -5.5San Francisco, CA 52,333,000 15.2 14.5 363,000 36.00 0.0 9.9San Jose/Silicon Valley, CA 3,365,000 27.9 31.2 (22,000) 32.40 -5.6 -11.2Seattle/Puget Sound, WA 32,289,000 20.9 18.9 468,000 29.10 -4.5 9.6Stockton/San Joaquin County, CA 2,774,000 27.6 28.0 (11,000) 21.60 2.3 0.0WEST TOTAL/AVERAGE 191,065,000 15.60 15.19 823,000 31.47U.S. TOTAL/AVERAGE 972,505,000 14.98 14.80 3,720,000 39.60 weighted 0.68 3.71 28.10 equal -0.20 -0.30 COLLIERS INTERNATIONAL | P. 5
  • 6. HIGHLIGHTS | Q1 2011 | OFFICE | NORTH AMERICAU.S. Office Market Begins the Year on a Soft Note EMPLOYMENT, PROFESSIONAL & BUSINESS SERVICESContinued from page 1 90and any boost is likely to be foreshadowed by a reduction in inducements 80 Month to Month Change, thousandswhich have not yet materialized beyond a handful of markets. 70 60U.S. office vacancy rate holds steady. The U.S. national office vacancyrate barely budged during the first quarter, shifting just one basis point 50higher (100 basis points equals one percent). Office vacancies finished the 40quarter at 15.46 percent but are still on track to finish the year below 15.00 30percent. During the first quarter, downtown vacancies increased 7 basispoints to register 14.19 percent. Suburban vacancy rates nudged lower, 20falling 3 basis points to 16.07 percent. Over the past 12 months, the U.S. 10national office vacancy rate has fallen 21 basis points. The flight to quality 0was particularly evident this quarter reflected by Class A vacancies, whichshrunk 21 basis points. Canadian office vacancy rates were mixed for the -10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Marquarter, with central business district (CBD) vacancies falling 26 basis 2010 2011points to 6.75 percent, and suburban vacancies increasing 16 basis pointsto 8.76 percent. Source: U.S. Bureau of Labor StatisticsOffice absorption positive for fourth consecutive quarter. The U.S. office ABSORPTION (SF) | SELECT DOWNTOWN MARKETS | Q1 2011market registered a fourth straight quarter of rising occupancies. First- -100,000 100,000 300,000 500,000 700,000quarter absorption came in at 8.1 million square feet (MSF)—substantiallybelow the fourth quarter of 2010, when occupied space increased by 14.8 Washington, DCMSF, but a considerable improvement from a year ago, when occupiedspace contracted by 5.1 MSF. Repeating a trend witnessed last quarter, SeattleClass A buildings continued to attract “move-up” tenants with Class Aabsorption totaling 10.4 MSF, compared to Class B and C buildings which San Franciscosaw a mild contraction in occupied space. Canadian markets also recorded Midtown S. Manhattanan increase in occupied space during the first quarter, with absorptiontotaling 2.6 MSF. This was just marginally below the 2.3 MSF recorded in Downtown Manhattanthe fourth quarter. PhiladelphiaRents continue to form a bottom. First-quarter data shows CBD rentsincreased by 0.7 percent to average $39.55 per square foot. This came on Bostontop of 0.9 percent increase in the fourth quarter. Suburban rents increased Midtown Manhattanby 0.6 percent to register $26.20 per square foot. Although small, this wasthe first increase in suburban rents since Q1 2008. Taking out the effectsof some of the larger, higher-priced markets, both downtown and subur-ban rents held steady during the quarter. Canadian downtown office rents ABSORPTION (SF) | SELECT SUBURBAN MARKETS | Q1 2011moved higher during Q1 with CBD quoted rents increasing 4.2 percent 0 400,000 800,000 1,200,000 1,600,000while suburban rents increased 3.1 percent. San Francisco PeninsulaOffice construction takes a surprising jump. First-quarter office comple- Northern New Jerseytions totaled 7.5 MSF, nearly doubling the fourth quarter, when construc-tion totaled 3.8 MSF. By historic standards, however, first-quarter comple- Dallastions were extremely low—a trend that is expected to continue. It shouldalso be noted that four markets account for more than 50 percent of Q1 Raleigh/Durhamnew supply: downtown Cincinnati, downtown Houston, downtown Seattle,and Menlo Park on the San Francisco Peninsula. Going forward, office San Jose/Silicon Valleydevelopment will remain extremely subdued, reflected in construction Houstonactivity which registered just 25.7 MSF at the end of the quarter. Lastquarter, construction underway registered 22.3 MSF. The Canadian office San Diegomarket had very little new construction during the first quarter, adding just336,000 square feet; however, across the country 6.6 MSF was under Denverconstruction at the end of the quarter.P. 6 | COLLIERS INTERNATIONAL
  • 7. HIGHLIGHTS | Q1 2011 | OFFICE | NORTH AMERICA UNITED STATES | SUBURBAN OFFICE | ALL INVENTORY EXISTING NEW SUPPLY UNDER VACANCY VACANCY ABSORPTION INVENTORY (SF) Q1 2011 CONSTRUCTION RATE (%) RATE (%) Q1 2011 MARKET MAR. 31, 2011 (SF) (SF) DEC. 31, 2010 MAR. 31, 2011 (SF) NORTHEAST Baltimore, MD 94,701,000 339,000 1,342,000 13.4 13.7 (152,000) Boston, MA 106,500,000 0 59,000 19.1 19.2 60,000 Fairfield County, CT 60,091,000 278,000 0 13.1 13.3 138,000 Hartford, CT 12,374,000 0 0 14.8 14.5 82,000 Long Island – Nassau, NY 41,762,000 40,000 55,000 10.7 10.7 54,000 Long Island – Suffolk, NY 29,607,000 0 94,000 11.6 11.1 159,000 New Jersey – Central 104,455,000 26,000 358,000 15.2 15.4 (251,000) New Jersey – Northern 138,911,000 0 406,000 14.2 13.3 1,281,000 Philadelphia, PA 109,239,000 0 285,000 16.2 15.7 563,000 Washington, DC 310,547,000 70,000 3,262,000 13.7 14.0 (307,000) Westchester County, NY 38,224,000 0 0 10.8 11.0 (35,000) NORTHEAST TOTAL/AVERAGE 1,046,412,000 753,000 5,860,000 14.39 14.38 1,592,000 SOUTH Atlanta, GA 165,736,000 0 314,000 18.6 18.4 296,000 Charleston, SC 9,394,000 0 0 19.1 17.4 163,000 Charlotte, NC 71,606,000 5,000 325,000 14.0 13.8 249,000 Columbia, SC 4,782,000 0 0 19.7 20.3 3,000 Dallas/Fort Worth, TX 255,335,000 50,000 488,000 17.1 16.9 766,000 Ft. Lauderdale/Broward Co., FL 44,225,000 0 0 14.7 14.2 195,000 Greenville, SC 4,291,000 0 14,000 23.3 23.3 110,000 Houston, TX 158,632,000 0 406,000 16.1 15.8 391,000 Jacksonville, FL 43,346,000 0 15,000 15.4 14.8 301,000 Little Rock, AR 7,364,000 0 23,000 11.0 10.7 19,000 Louisville, KY 35,350,000 54,000 20,000 13.1 11.8 521,000 Memphis, TN 28,542,000 0 12,000 13.0 13.0 61,000 Miami-Dade, FL 64,224,000 90,000 485,000 14.6 14.8 (22,000) Nashville, TN 23,472,000 0 457,000 10.5 10.8 18,000 Orlando, FL 54,867,000 0 213,000 16.6 16.3 151,000 Raleigh/Durham/Chapel Hill, NC 75,286,000 188,000 126,000 12.8 12.6 641,000 Tampa, FL 71,526,000 0 0 15.8 16.0 (166,000) West Palm Beach/Palm Beach Co., FL 29,133,000 73,000 32,000 20.7 20.1 255,000 SOUTH TOTAL/AVERAGE 1,147,111,000 461,000 2,930,000 16.06 15.81 3,953,000P. 7 | COLLIERS INTERNATIONAL
  • 8. HIGHLIGHTS | Q1 2011 | OFFICE | NORTH AMERICAUNITED STATES | SUBURBAN OFFICE | ALL INVENTORY EXISTING NEW SUPPLY UNDER VACANCY VACANCY ABSORPTION INVENTORY (SF) Q1 2011 CONSTRUCTION RATE (%) RATE (%) Q1 2011MARKET MAR. 31, 2011 (SF) (SF) DEC. 31, 2010 MAR. 31, 2011 (SF)MIDWESTChicago, IL 152,351,000 0 416,000 18.0 18.2 (196,000)Cincinnati, OH 32,624,000 16,000 195,000 19.0 21.2 70,000Cleveland, OH 92,075,000 14,000 872,000 10.2 10.4 (141,000)Columbus, OH 43,748,000 65,000 140,000 14.2 14.0 (73,000)Detroit, MI 99,591,000 27,000 4,000 21.1 21.8 (117,000)Grand Rapids, MI 12,750,000 0 0 25.5 25.5 12,000Indianapolis, IN 57,189,000 0 0 12.2 12.1 90,000Kansas City, MO-KS 58,416,000 66,000 0 14.0 13.8 190,000St. Louis, MO 54,475,000 0 0 11.2 11.8 (337,000)MIDWEST TOTAL/AVERAGE 603,220,000 188,000 1,627,000 15.70 16.02 (501,000)WESTBakersfield, CA 5,975,000 7,000 0 9.8 10.2 (16,000)Boise, ID 10,819,000 0 16,000 22.2 22.0 20,000Denver, CO 100,907,000 286,000 68,000 15.8 15.6 231,000Fairfield, CA 4,221,000 0 0 25.1 27.5 (103,000)Fresno, CA 17,829,000 30,000 0 13.6 13.4 29,000Honolulu, HI 7,593,000 0 0 11.3 12.1 (64,000)Las Vegas, NV 35,009,000 255,000 32,000 26.3 27.0 (81,000)Los Angeles – Inland Empire, CA 21,667,000 0 0 24.8 25.7 (172,000)Los Angeles, CA 171,405,000 191,000 921,000 17.6 18.0 (516,000)Oakland, CA 15,877,000 0 0 17.4 19.4 (319,000)Orange County, CA 79,486,000 0 0 22.0 21.7 290,000Phoenix, AZ 107,537,000 0 649,000 22.5 22.6 (203,000)Pleasanton/Walnut Creek, CA 32,975,000 0 0 14.3 16.1 (580,000)Portland, OR 44,643,000 63,000 0 13.8 12.9 460,000Reno, NV 5,548,000 0 0 18.9 19.9 (69,000)Sacramento, CA 72,768,000 80,000 147,000 18.8 19.2 (202,000)San Diego County, CA 67,861,000 0 87,000 16.1 15.7 296,000San Francisco Peninsula, CA 35,153,000 1,635,000 0 17.6 15.3 1,586,000San Jose/Silicon Valley, CA 54,009,000 0 538,000 19.9 18.9 416,000Seattle/Puget Sound, WA 75,311,000 0 199,000 13.5 13.7 (112,000)WEST TOTAL/AVERAGE 966,593,000 2,547,000 2,657,000 18.24 18.25 890,000U.S. TOTAL/AVERAGE 3,763,336,000 3,949,000 13,073,000 16.10 16.07 5,934,000 COLLIERS INTERNATIONAL | P. 8
  • 9. HIGHLIGHTS | Q1 2011 | OFFICE | NORTH AMERICA UNITED STATES | SUBURBAN OFFICE | CLASS A AVERAGE ANNUAL QUARTERLY ANNUAL EXISTING VACANCY VACANCY ABSORPTION QUOTED RENT CHANGE IN CHANGE IN INVENTORY (SF) RATE (%) RATE (%) Q1 2011 (USD PDF) RENT RENT MARKET MAR. 31, 2011 DEC. 31, 2010 MAR. 31, 2011 (SF) MAR. 31, 2011 (%) (%) NORTHEAST Baltimore, MD 32,243,000 17.9 19.3 153,000 25.10 -3.6 2.7 Boston, MA 44,718,000 18.0 18.1 (33,000) 26.20 1.5 -0.2 Fairfield County, CT 30,692,000 15.1 15.2 188,000 35.00 1.1 – Hartford, CT 7,472,000 14.7 14.3 46,000 20.50 0.6 0.2 Long Island – Nassau, NY 13,695,000 11.5 10.7 108,000 31.50 – – Long Island – Suffolk, NY 10,614,000 14.4 14.3 5,000 27.90 – – New Jersey – Central 61,860,000 16.9 16.9 23,000 22.80 -2.3 -11.6 New Jersey – Northern 84,041,000 14.1 14.0 24,000 24.70 1.0 0.9 Philadelphia, PA 67,408,000 16.2 15.5 486,000 24.10 0.1 -1.4 Washington, DC 161,908,000 15.6 15.8 2,000 31.30 0.1 2.4 Westchester County, NY 18,423,000 13.3 13.4 (24,000) 27.40 0.7 – NORTHEAST TOTAL/AVERAGE 533,073,000 15.68 15.73 979,000 27.42 SOUTH Atlanta, GA 77,122,000 18.8 18.1 509,000 21.90 2.0 0.1 Charleston, SC 4,425,000 16.0 14.1 85,000 23.10 -1.8 2.5 Charlotte, NC 18,192,000 17.4 16.5 149,000 20.20 -0.6 0.1 Columbia, SC 888,000 16.3 16.3 35,000 17.40 2.2 -0.7 Dallas/Fort Worth, TX 90,438,000 18.6 18.4 184,000 24.80 0.0 -0.4 Ft. Lauderdale/Broward Co., FL 10,810,000 19.7 18.9 95,000 28.60 2.4 0.5 Greenville, SC 1,772,000 19.8 20.6 (8,000) 17.60 0.1 -1.0 Houston, TX 69,828,000 17.4 16.6 538,000 26.90 -0.7 -3.5 Jacksonville, FL 9,785,000 12.9 11.6 147,000 19.60 1.6 -2.8 Little Rock, AR 2,689,000 15.1 14.6 13,000 18.50 0.0 0.0 Louisville, KY 7,025,000 24.2 17.3 352,000 20.00 -0.2 4.2 Memphis, TN 7,132,000 10.2 10.2 (5,000) 21.40 -1.3 -3.6 Miami-Dade, FL 15,346,000 21.6 22.0 2,000 32.00 -0.4 -0.2 Nashville, TN 12,809,000 7.5 8.5 (9,000) 22.40 0.1 7.3 Orlando, FL 16,924,000 20.5 20.6 (16,000) 22.70 -1.1 -1.5 Raleigh/Durham/Chapel Hill, NC 25,217,000 16.2 17.0 152,000 21.70 0.6 1.8 Tampa, FL 23,536,000 17.3 17.6 (65,000) 23.10 -1.0 -3.1 West Palm Beach/Palm Beach Co., FL 9,224,000 20.4 20.0 102,000 30.20 0.5 -1.0 SOUTH TOTAL/AVERAGE 403,163,000 17.81 17.38 2,258,000 24.04P. 9 | COLLIERS INTERNATIONAL
  • 10. HIGHLIGHTS | Q1 2011 | OFFICE | NORTH AMERICAUNITED STATES | SUBURBAN OFFICE | CLASS A AVERAGE ANNUAL QUARTERLY ANNUAL EXISTING VACANCY VACANCY ABSORPTION QUOTED RENT CHANGE IN CHANGE IN INVENTORY (SF) RATE (%) RATE (%) Q1 2011 (USD PDF) RENT RENTMARKET MAR. 31, 2011 DEC. 31, 2010 MAR. 31, 2011 (SF) MAR. 31, 2011 (%) (%)MIDWESTChicago, IL 75,688,000 19.2 18.8 281,000 27.30 0.0 -1.0Cincinnati, OH 16,175,000 20.4 19.6 87,000 20.20 -1.1 -1.5Cleveland, OH 12,937,000 12.1 12.6 (76,000) 21.60 -2.0 -0.7Columbus, OH 25,563,000 8.1 8.4 (80,000) 17.30 -3.0 -7.2Detroit, MI 25,659,000 18.1 19.7 (108,000) 22.20 0.0 -1.1Grand Rapids, MI 2,819,000 32.8 32.8 (2,000) 18.70 0.0 2.1Indianapolis, IN 15,074,000 16.0 15.2 116,000 16.90 -7.7 –Kansas City, MO-KS 12,400,000 17.4 17.8 7,000 20.60 -2.3 -8.6St. Louis, MO 24,153,000 13.2 13.3 (12,000) 21.80 0.6 -5.9MIDWEST TOTAL/AVERAGE 210,467,000 16.54 16.57 213,000 27.42WESTBakersfield, CA 2,698,000 6.5 6.5 5,000 24.00 0.0 0.0Boise, ID 4,684,000 24.1 24.2 (3,000) 18.00 0.0 -1.4Denver, CO 32,750,000 14.2 13.1 467,000 21.50 3.7 3.7Fairfield, CA 1,763,000 24.9 29.5 (82,000) 25.60 -1.4 -2.7Fresno, CA 3,850,000 18.0 17.9 28,000 25.20 0.0 0.0Las Vegas, NV 4,923,000 39.0 38.0 97,000 31.40 -2.9 -6.8Los Angeles – Inland Empire, CA 4,970,000 32.0 31.9 (3,000) 24.10 -2.9 -11.5Los Angeles, CA 102,537,000 18.1 18.4 (247,000) 34.60 7.1 -2.0Oakland, CA 3,582,000 26.8 29.1 (83,000) 25.90 0.9 -9.6Orange County, CA 32,936,000 23.6 23.6 16,000 26.00 -0.5 -6.9Phoenix, AZ 31,583,000 26.5 25.8 232,000 23.80 -0.8 -6.0Pleasanton/Walnut Creek, CA 16,299,000 14.8 14.2 106,000 22.80 -3.6 0.5Portland, OR 12,549,000 13.6 11.9 221,000 23.20 0.1 1.7Reno, NV 3,001,000 17.1 20.0 (86,000) 19.90 0.0 -2.9Sacramento, CA 16,388,000 25.9 25.0 219,000 23.60 -0.8 -4.5San Diego County, CA 23,983,000 17.3 15.8 286,000 31.60 -0.8 -5.1San Francisco Peninsula, CA 22,246,000 16.8 13.8 1,605,000 33.10 3.0 1.1San Jose/Silicon Valley, CA 26,212,000 23.4 20.8 571,000 34.10 -1.7 -5.4Seattle/Puget Sound, WA 27,263,000 16.0 16.5 (130,000) 27.50 -3.1 7.0WEST TOTAL/AVERAGE 374,216,000 19.65 19.08 3,216,000 28.76U.S. TOTAL/AVERAGE 1,520,920,000 17.34 17.11 6,665,000 26.20 weighted 0.63 -1.47 24.40 equal 0.11 -1.23 COLLIERS INTERNATIONAL | P. 10
  • 11. HIGHLIGHTS | Q1 2011 | OFFICE | NORTH AMERICA CANADA | DOWNTOWN OFFICE | ALL INVENTORY EXISTING NEW SUPPLY UNDER VACANCY VACANCY ABSORPTION INVENTORY (SF) Q1 2011 CONSTRUCTION RATE (%) RATE (%) Q1 2011 MARKET MAR. 31, 2011 (SF) (SF) DEC. 31, 2010 MAR. 31, 2011 (SF) Calgary, AB 37,809,000 0 1,940,000 12.0 10.9 393,000 Edmonton, AB 10,632,000 0 630,000 8.0 7.6 30,000 Guelph, ON 383,000 0 55,000 12.2 13.8 (6,000) Halifax, NS 4,913,000 0 4,000 9.2 6.5 4,000 Kitchener-Waterloo, ON 3,592,000 0 176,000 14.1 13.3 29,000 Montreal, QC 49,429,000 0 0 7.2 7.4 (73,000) Ottawa, ON 14,992,000 0 550,000 5.6 5.6 (2,000) Regina, SK 3,549,000 33,000 200,000 1.4 1.8 (10,000) Saskatoon, SK 2,092,000 20,000 70,000 5.8 4.6 24,000 Toronto, ON 88,032,000 0 645,000 5.4 5.5 928,000 Vancouver, BC 24,237,000 0 127,000 4.6 3.7 215,000 Winnipeg, MB 11,139,000 0 0 7.2 6.8 38,000 CANADA TOTAL/AVERAGE 250,797,000 53,000 4,396,000 7.02 6.75 1,570,000 CANADA | DOWNTOWN OFFICE | CLASS A VACANCY VACANCY AVERAGE ANNUAL QUARTERLY ANNUAL RATE (%) RATE (%) ABSORPTION QUOTED RENT CHANGE CHANGE EXISTING INVENTORY (SF) DEC. 31, MAR. 31, Q1 2011 (CAD PSF) IN RENT IN RENT MARKET MAR. 31, 2011 2010 2011 (SF) MAR. 31, 2011 (%) (%) Calgary, AB 24,787,000 9.8 8.8 253,000 39.50 0.0 -2.5 Edmonton, AB 8,254,000 7.2 7.2 (1,000) 39.20 1.9 -5.9 Guelph, ON 203,000 6.9 0.0 14,000 27.40 5.2 5.2 Halifax, NS 1,916,000 4.7 6.7 (4,000) 32.40 2.6 1.6 Kitchener-Waterloo, ON 1,425,000 10.0 8.2 26,000 23.20 -6.4 -16.1 Montreal, QC 23,076,000 7.5 7.3 50,000 37.00 5.7 15.6 Ottawa, ON 9,001,000 6.6 6.6 4,000 48.40 0.2 0.3 Regina, SK 1,031,000 1.1 1.5 (5,000) 37.10 6.1 6.7 Saskatoon, SK 492,000 0.2 0.2 0 34.00 0.0 7.9 Toronto, ON 41,585,000 6.7 6.1 571,000 55.70 8.5 9.4 Vancouver, BC 9,843,000 2.8 2.4 40,000 53.50 0.9 9.2 Winnipeg, MB 2,619,000 6.6 6.6 1,000 30.00 0.0 – CANADA TOTAL/AVERAGE 124,232,000 7.11 6.64 949,000 45.60 weighted 4.21 5.34 38.10 equal 2.33 1.23P. 11 | COLLIERS INTERNATIONAL
  • 12. HIGHLIGHTS | Q1 2011 | OFFICE | NORTH AMERICA CANADA | SUBURBAN OFFICE | ALL INVENTORY EXISTING NEW SUPPLY UNDER VACANCY VACANCY ABSORPTION INVENTORY (SF) Q1 2011 CONSTRUCTION RATE (%) RATE (%) Q1 2011 MARKET MAR. 31, 2011 (SF) (SF) DEC. 31, 2010 MAR. 31, 2011 (SF) Calgary, AB 23,303,000 0 606,000 11.2 9.8 322,000 Edmonton, AB 8,817,000 0 40,000 15.5 15.4 23,000 Guelph, ON 1,353,000 0 0 3.8 4.3 (6,000) Halifax, NS 6,256,000 59,000 50,000 11.0 9.7 6,000 Kitchener-Waterloo, ON 5,889,000 52,000 519,000 6.3 8.0 (49,000) Montreal, QC 23,621,000 0 112,000 9.8 9.9 (30,000) Ottawa, ON 20,619,000 60,000 122,000 8.0 7.9 (52,000) Regina, SK 659,000 0 0 0.6 0.3 2,000 Toronto, ON 97,815,000 0 0 6.6 7.2 830,000 Vancouver, BC 27,273,000 113,000 668,000 10.8 10.9 45,000 Winnipeg, MB 3,173,000 0 37,000 11.8 12.5 (17,000) CANADA TOTAL/AVERAGE 218,777,000 283,000 2,154,000 8.60 8.76 1,074,000 CANADA | SUBURBAN OFFICE | CLASS A VACANCY VACANCY AVERAGE ANNUAL QUARTERLY EXISTING RATE (%) RATE (%) ABSORPTION QUOTED RENT CHANGE ANNUAL CHANGE INVENTORY (SF) DEC. 31, MAR. 31, Q1 2011 (CAD PSF) IN RENT IN RENT MARKET MAR. 31, 2011 2010 2011 (SF) MAR. 31, 2011 (%) (%) Calgary, AB 10,609,000 12.1 9.9 229,000 37.00 5.7 0.0 Guelph, ON 821,000 0.4 1.1 (6,000) 25.60 -1.3 -3.8 Halifax, NS 2,650,000 8.8 7.8 24,000 28.30 5.9 8.3 Kitchener-Waterloo, ON 2,413,000 7.7 10.4 (18,000) 23.00 -3.1 -13.8 Montreal, QC 13,226,000 8.6 8.6 (2,000) 30.00 15.4 25.0 Ottawa, ON 11,626,000 7.4 7.8 9,000 32.70 2.0 0.8 Regina, SK 659,000 0.6 0.3 2,000 28.50 0.0 16.3 Toronto, ON 43,062,000 6.8 8.1 434,000 30.40 -0.4 6.0 Vancouver, BC 13,132,000 13.0 13.3 28,000 38.50 1.3 40.0 CANADA TOTAL/AVERAGE 98,198,000 8.49 8.96 700,000 32.10 weighted 3.09 10.54 30.40 equal 2.83 8.07GlossaryInventory – Includes all existing multi- or single- New Supply – Includes completed speculative and Cap Rate – (Or going-in cap rate) Capitalizationtenant leased and owner-occupied office properties build-to-suit construction. New supply quoted on a rates in this survey are based on multi-tenantgreater than or equal to 10,000 square feet (net net basis after any demolitions or conversions. institutional grade buildings fully leased at marketrentable area). In some larger markets this minimum rents. Cap rates are calculated by dividing netsize threshold may vary up to 50,000 square feet. Annual Quoted Rent – Includes all costs associated operating income (NOI) by purchase price.Does not include medical or government buildings. with occupying a full floor in the mid-rise portion of a Class A building inclusive of taxes, insurance, Note: SF = square feetVacancy Rate – Percentage of total inventory maintenance, janitorial and utilities (electricity PSF = per square footphysically vacant as at the survey date including surcharges added where applicable). All office rents CBD = central business districtdirect vacant and sublease space. in this report are quoted on an annual, gross per square foot basis. Rent calculations do not includeAbsorption – Net change in physically occupied sublease space.space over a given period of time. COLLIERS INTERNATIONAL | P. 12
  • 13. HIGHLIGHTS | Q1 2011 | OFFICE | NORTH AMERICAUNITED STATES | OFFICE INVESTMENT CBD CBD SUBURBAN SUBURBAN 512 offices in 61 countries on SALES PRICE CAP RATE SALES PRICE CAP RATEMARKET (USD PSF) (%) (USD PSF) (%)Atlanta, GA 125.00 8.52 141.00 9.08Bakersfield, CABaltimore, MD – – – – 178.56 181.00 7.25 7.50 6 continentsBoston, MA 558.00 5.70 128.00 – United States: 125Charleston, SC 250.00 8.00 135.00 11.00 Canada: 38Chicago, IL 165.00 7.25 106.00 8.50 Latin America: 18Columbus, OH – 105.00 7.00 Asia Pacific: 214Dallas/Fort Worth, TX 80.00 8.00 110.00 7.50 EMEA: 117Denver, CO 280.00 7.50 150.00 8.20Fairfield County, CT – – 250.00 8.00 • $1.5 billion in annual revenueFresno, CA 105.00 9.00 140.00 8.50Ft. Lauderdale/Broward Co., FL – – 94.00 7.00 • 979 million square feet underGreenville, SC – – – – managementHartford, CT – – 34.00 9.45 • Over 12,000 professionalsHouston, TX 191.50 7.50 175.00 8.10Jacksonville, FL 90.95 9.80 116.25 8.75Kansas City, MO-KS – 8.00 – 8.00 COLLIERS INTERNATIONALLas Vegas, NV – – 51.43 –Little Rock, AR 88.00 9.50 110.00 9.25 601 Union Street, Suite 4800Long Island – Nassau, NY – – 75.00 6.10 Seattle, WA 98101Long Island – Suffolk, NY – – 75.00 6.10 TEL +1 206 695 4200Los Angeles – Inland Empire, CA – – 89.00 –Los Angeles, CA 300.00 5.50 250.00 8.00Miami-Dade, FL – – 225.00 –Nashville, TN – – 65.00 7.75 FOR MORE INFORMATIONNew York, NY – Downtown Manhattan 97.00 6.90 – – Ross J. MooreNew York, NY – Midtown Manhattan 404.00 5.00 – – Chief Economist | USANew York, NY – Midtown S. Manhattan 404.00 5.00 – – TEL +1 617 722 0221Oakland, CA – 8.00 – 9.00Orange County, CA – – 175.00 8.00 EMAIL ross.moore@colliers.comPhiladelphia, PA 132.00 9.00 117.00 9.00Phoenix, AZ 129.00 – 70.00 10.00Pleasanton/Walnut Creek, CA 112.50 8.00 87.50 8.50Raleigh/Durham/Chapel Hill, NC 292.07 – 129.22 – Copyright © 2011 Colliers International.Sacramento, CA 180.00 8.10 135.00 8.30 The information contained herein has been obtainedSan Diego County, CA – – 190.08 – from sources deemed reliable. While every reasonableSan Francisco Peninsula, CA – – 250.00 6.50 effort has been made to ensure its accuracy, we cannotSan Francisco, CA 317.00 6.50 – – guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult theirSeattle/Puget Sound, WA 152.16 8.14 90.53 7.02 professional advisors prior to acting on any of theSt. Louis, MO 90.00 9.00 127.00 8.50 material contained in this report.Stamford, CT 350.00 8.00 – –Stockton/San Joaquin County, CA 125.00 8.60 – –Tampa, FL – – 191.50 9.50West Palm Beach/Palm Beach Co., FL – – 217.00 9.25Westchester County, NY – – 250.00 8.00White Plains, NY 350.00 8.00 – –CANADA | OFFICE INVESTMENT CBD CBD SUBURBAN SUBURBAN SALES PRICE CAP RATE SALES PRICE CAP RATEMARKET (CAD PSF) (%) (CAD PSF) (%)Calgary, AB 380.00 6.50 350.00 7.00Edmonton – – 360.59 6.43Guelph, ON 140.00 7.50 150.00 7.50Halifax, NS – – 125.00 8.25Kitchener-Waterloo, ON 140.00 7.50 150.00 7.50Montreal, QC 275.00 7.00 190.00 7.50Ottawa, ON 270.00 7.25 145.00 7.60Regina, SK 98.00 8.00 – –Saskatoon, SK 240.00 7.00 – –Toronto, ON – – – –Vancouver, BC 400.00 5.75 300.00 6.50 Accelerating success.Winnipeg, MB 155.00 7.75 135.00 7.75WWW.COLLIERS.COM