*** Positive signs of stabilization in US commercial properties rents
(WSJ)
In a sign that the country's commercial real-estate market is finally turning the corner, new statistics show that office rents that have been falling throughout the economic downturn are beginning to stabilize. In the latest deal, publicly traded landlord Boston Properties Inc., run by real-estate and media mogul Mortimer Zuckerman, on Monday said it would buy Boston's tallest skyscraper, the John Hancock Tower, for $930 million. Commercial real estate, an enormous sector with some $1.4 trillion of debt coming due by the end of 2014, has been closely watched by regulators and financial companies because it could act as an anchor on the economy as it struggles to recover. The pressure on rents now seems to be easing. Average effective rents fell by just a penny in the last three months, the smallest quarterly decline since 2008. At $22.05 per square foot per year, effective rents are 12% below the 2008 high of $25.07. In New York, for example, where rents plummeted 19% in 2009, they were up 0.2% to $43.75. In another sign that the bottom is near, the increase in the national vacancy rate in each of the past two quarters was smaller than quarterly changes throughout 2009. National office vacancy rate to 17.5%, the highest level since 1993 but unlikely to reach the 1992 high of 18.7%. Another factor in what's likely to be a slow recovery: changes in workplace design that require far fewer square feet of office space per employee.
