Appraisal Podcasts

RealEstateJournal | Tenants May Gain Clout In Office-Rental Market

Office landlords had a heyday in 2006 as rents rose at the fastest pace in six years. Yet there are signs that conditions could be turning a little more in the favor of tenants.

Newly released data by Reis Inc., a New York real-estate research firm, show that office rents rose 9% nationally last year, the heftiest increase since the height of the technology boom in 2000. However, the report also found that demand for new office space slowed sharply near the end of last year, a sign that large rent increases may not continue.

Demand for office space is measured by tracking the “absorption” rate, a closely watched number that quantifies the change in the net amount of occupied space. In the fourth quarter, tenants in the nation’s 79 largest markets absorbed a net 7.6 million square feet of space, according to Reis, compared with 11.6 million in the third quarter and 15.9 million in the second.

“It is clear that investors cannot expect the same pace of rent growth without a more cooperative level of net absorption,” said Lloyd Lynford, Reis’ chief executive. He noted that slowing growth in demand for office space tracks closely with the slowdown in employment growth in the second half. (more)

RealEstateJournal | Failed Condos Spur Rise in Vacant Apartments

The U.S. apartment market ended 2006 with a surprisingly large increase in the number of empty apartments, due to a combination of rising rents, seasonal factors and increased supply from failed condominium projects converted to rentals.
The average vacancy rate for the 79 largest U.S. markets rose to 5.9% in the fourth quarter, up from 5.5% in the third quarter and 5.7% a year earlier. The increase was the fastest quarterly jump since the first quarter of 2003, according to Reis Inc., a New York research firm.

“It’s a bigger increase in vacancy than we expected,” said Sam Chandan, chief economist at Reis. Rental buildings that were converted to condos reverted to rental units in a slowing housing market, most notably in Florida. Completion of new apartments also increased supply, bumping up vacancy rates, he added.

Meantime, landlords continued to increase rents at a strong clip as people fled to apartments from a pricey and uncertain for-sale market. Rents increased 0.9% in the quarter from the preceding quarter and rose 4.4% from a year earlier. The average apartment rent nationally, including concessions landlords give such as a month’s free rent, was $930, versus $922 in the third quarter and $891 in the fourth quarter of 2005. (more)

Appraisal Institute Announces 2007 National Officers
The Appraisal Institute, the leading organization for professional real estate appraisers, has announced its national officers for 2007: President Terry Dunkin, MAI, SRA; President-Elect R. Wayne Pugh, MAI; Vice President Jim Amorin, MAI, SRA, and Immediate Past President Richard Powers, MAI, SRA. The officers were sworn in during the fall meeting of the Appraisal Institute’s Board of Directors, held in Chicago on December 4-5. As the Appraisal Institute celebrates its 75th anniversary during 2007, this new leadership team will be instrumental in guiding various programs and projects throughout the year, including the planning of anniversary events as well as the continuation of a national visibility campaign to increase awareness of Appraisal Institute designated members. (more)