Deal Velocity Accelerates
For the past several years, the North I-680 Corridor has seen tremendous growth in the office market. Vacancy decreased slightly to 14.9 percent, from 15.0 percent last year. While the vacancy rate has flattened, rental rates continue to surge. Investors also took notice, as more sale transactions occurred this past quarter than usual.
Class A rents overall are at $3.52 per square foot, a $0.12 increase over the last year. Class B rents have increased to $2.52 per square foot from $2.44 over the same period. Overall average asking rents increased to $3.07 per square foot, a $0.03 increase from the prior quarter. This marks six consecutive quarters of increasing asking rates in the North I-680 Corridor. While rents as a whole have seen a new high watermark for the past several quarters, brokers caution that several availabilities in our market are quoting higher rents than the market dictates, giving a false sense of increasing rents.
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