"Flight to Quality" ~ a two way street
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• Two Sentence Overview: More often than not, you will hear the phrase “Flight to Quality” associated with office tenants who upgrade from class B spaces to class A spaces. This is a short blog post that describes what we have seen in regards to tenants looking to upgrade to higher quality landlords as well.
• One Sentence Takeaway: As we continue to climb out of this soft market tenants will look to upgrade space, but will also be looking to upgrade their building's ownership.
CBD’s going strong
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• Two Sentence Overview: CW’s 3Q US office report indicates that 18 of 30 major US CBDs showed increases in leasing activity. This general rise in activity led to declines in vacancy in most markets.
• One Sentence Takeaway: This report is another indication that we may have found a floor but that a recovery back to pre recession fundamentals will probably be a long and slow one.
No New Permits
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• Two Sentence Overview: The Obama administration reluctantly lifted the drilling moratorium over a month ago, but no new drilling permits have been issued in the Gulf of Mexico since the ban ended. The longer permits are stifled the more direct impact this moratorium will have on Houston jobs.
• One Sentence Takeaway: As a result of the midterm elections we may see additional pressure for more permits, but 2011 will more than likely be slow, resulting in a drop in oil output which more than likely will affect jobs in this sector.
Business Week: Oil to $100 a Barrel?
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• Two Sentence Overview: Oil prices have remained relatively benign for most of the year (staying around $78 a barrel) due to slow global growth and large inventories and supply. With the Fed weakening the dollar by printing money (buying $600 of Treasuries) and global demand picking up during the recovery, we could see a run up in oil prices.
• One Sentence Takeaway: Just from my narrow Houston Office space mind, $100 a barrel oil could be a good indicator for positive absorption in 2011.
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