Office vacancies in the U.S. rose to the highest level since 1993 in the second quarter as the sluggish economic recovery damps demand from corporate tenants, Reis Inc. said in a report.
The vacancy rate climbed to 17.4 percent from 16 percent a year earlier and 17.3 percent in the first quarter, the New York-based research company said today in a statement. Effective rents, the amount tenants actually pay landlords, fell 5.7 percent from a year earlier and 0.9 percent from the previous three months, according to Reis.
That's staggering. More than one in six office spaces in this country are vacant right now. There is nothing that indicates that this will improve anytime soon and more than enough evidence to assume that this may jump to 19 or 20% soon. Rents are down big time because of the oversupply...so why are these office spaces empty?
We built too many of them during the housing boom, simple. Same goes for hotels...and even apartment vacancies are up now, people are trading down from condos to good apartments, from good apartments to decent ones, from decent apartments to lousy ones, and from lousy ones to the couch in Mom's basement...or worse.
The deflationary death spiral continues unabated.