Posts Tagged ‘commercial investments’
Speculating a Year Ahead of Office Demand
If you have plenty of intestinal fortitude, the business office market in America’s heartland might be of interest to you. The coastal gateway cities have been the rebound markets for commercial office space but that might change late in 2011. Don’t get me wrong, the coastal gateway cities are as close to recession proof commercial investments as you’ll find. However, not many of us have the ability to finance between $75 to $200 million dollar properties.
What is currently happening is the profit yield between the coastal cities office buildings and landlocked cities is now favoring the Midwest markets that have been passed over by the mega investors. Washington D.C. alone had more than $1.4 billion in office property sales of $5 million or more during the first three quarters of 2010. In comparison, all of the Midwest had similar office sales of only about $535 million during the same time.
As with almost every commercial sector, unemployment remains a key economic recovery statistic. We’ve seen the retail sector do better than anticipated during the recent holiday shopping season. Several employers indicated they plan to keep at least some of the temporary employees they hired. But there is little indication that white collar office hiring is going to improve anytime soon. One big question that needs to be answered is how much white-collar employment will increase even as the recovery moves forward?