Have you been wondering how the job market fared during Mr. Obama’s first term? The economy added 594,000 jobs through October of 2012, according to the Wall Street journal. Private sector payrolls rose by $1.9 million. We continue on…since the President’s re-election we have been on a strong path. November showed robust job creation at 247,000 new jobs.
The U.S. unemployment rate was at 7.9% in January. Los Angeles County unemployment stood at 10.2%, according to latest figures.
Office real estate is showing a sign of life as the economy comes out of hibernation. In January 2011, no office properties were sold in Los Angeles, according to Clarus Market Metrics. January 2013 saw 5 office properties sold. Infinitely better than 0.
And, here’s something noteworthy about office properties that are selling < notice that they are selling are spending a fraction of the time on the market. In January, office properties sold in 103 days, while the average office property had spent 932 day on the market. So, if you figure 60 days to close escrow, these properties are priced right, desirable, and well market, so they’re getting chosen early in the market cycle. Selling at the rate of 5 per month, there is an estimated 46-month supply of office buildings available for sale in Los Angeles.
Another positive sign for office real estate > tenant demand is up, opening the door for widespread rental rate increases this year, according to CoStar Group’s Year-End 2012 Office Review & Outlook.
Nationwide, in the fourth quarter, tenants absorbed a net 24 million square feet of space, bringing the 2012 total to 59 million square feet of net absorption for the year, up from 41 million square feet in 2011.
Texas continues to be strong with Houston and Dallas-Fort Worth in full recovery. Former recession-hammered metros like Phoenix, Atlanta and Orange County, CA, where the local economies have benefited from increased office hiring and a gradually improving housing market. Finally, Phoenix office vacancy rates have fallen under 20%.
Rent growth rose 1.7% year over year in 2012 and still is moving upward. CoStar projects that average growth will reach 3% next year. The rising rent phenomenon will be beyond A-list, A-market properties, but will spread to more markets as limited supply is absorbed. Secondary and tertiary markets, get enthused…but not so much…
Employers still need to add more than 3.2 million jobs to get back to the level of employment in January, 2008.
We’re here to help you with your commercial and investment property needs. Please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – email@example.com or 310.392.1211, and let us move forward together.
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