CRE Cliffnotes (8.20.10)

In the midst of Favre returning and Clemens getting indicted I managed to come across some relevant (and hopefully) value added articles this week. But unlike Clemens, I am not going to lie… the news this week was more on the negative side then this optimist would personally like. But, in the spirit of Favre, I “owe it” to everyone to report what I see. So with these stretched links aside, let’s get to it:

WSJ: Tenants Taking less space
• Link
• Two Sentence Overview: Even though there has been a national rebound in office leasing activity (161.3 million SF of leases signed in the past 12 months or a 5.7% increase over the previous 12 months), existing tenants are taking less space than they had previously. Tenants either do not have a demand due to a downsized workforce or they are being more efficient with their space with collaborative work environments (less SF per employee).
• One Sentence Takeaway: I hate to be Debbie Downer but this is definitely a negative trend for the office market, however tenants consolidating and reducing space needs in the name of efficiency emphasizes the importance of having a “best in show” leasing and managing service to maximize occupancy and tenant retention (whether that be in house or a 3rd party provider).

Jobless Claims Up:
• Link
• Two Sentence Overview: If you are like me, you are tired of this report already as artificially created (stimulus induced) government jobs are decreasing initial claims for jobless benefits rose 12,000 to 500,000 last week. As this chart shows this could mean that even if jobless claims improve, it could be a while before there is positive growth in jobs.
• One Sentence Takeaway: Without question this was a disappointing figure that points to weakness in the job market, however the story remains for office owners that we do not have a supply problem and once jobs pick up (and therefore demand) – positive fundamentals will return.

Oily Issues:
• Link
• Two Sentence Overview: No question, the moratorium set by our fearless leaders in Washington is costing the Houston economy jobs (anywhere between 12K on the low end and 50K on the high end). In Houston, Chevron and HighMount have already laid off workers and Halliburton and Baker Hughes have relocated others.
• One Sentence Takeaway: The moratorium only exasperates an already difficult situation and one can only hope that leaders in Washington are persuaded to act accordingly.