Atlanta Tenants in the Atlanta market are beginning to feel more comfortable in making real estate decisions, demonstrated by a 22.4 percent increase in leasing volume over the last three months. Year-over-year, however, activity levels remained depressed, but recent increases in leasing announcements should help drive momentum going forward. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/AtlantaResearch_Publications.aspx 139863183 20.35 0.198931051068672 0.22069423373555 308459 0.00220543386317756 0 1692572 Austin Fundamentals are returning to Austin as activity picks up around the market. Occupancy in the CBD continued to increase with the downtown market having shed 2.3 percent of its total vacant space since December 2009. Total vacancy in the suburban markets decreased this quarter as well, but only gained back the ground lost over the first few months of the year. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/Austin-Research.aspx 45133040 25.67 0.196004164048589 0.211945385970191 329399 0.00729840046227775 51000 138802 Baltimore The region's growing government presence, diverse private sector tenant base and stable inventory will position the Baltimore market to experience balanced market conditions through the rest of the year. Specifically, expansions at Fort Meade and Aberdeen Providing Ground due to BRAC and increased focus on healthcare initiatives and investment will drive activity in both the long and short term. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/Baltimore-Research.aspx 67609378 22.71 0.146511923242364 0.154606954082613 561398 0.00830355220839334 1229968 566245 Boston The Back Bay continued its positive momentum when Bain Capital announced plans to relocate into 200 Clarendon Street from 111 Huntington Avenue. Bain's move will likely lead to a game of musical chairs for the submarket's largest tenants. The Financial District, however, continued to experience declining occupancy as tenants consolidate. At One Financial Center, landlord Beacon Capital Partners marketed 157,247 square feet currently occupied by Ameriprise Financial. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/Boston-Research-Portal.aspx 158113957 28.38 0.144400718527334 0.214303807474757 516440 0.00326625182114695 778000 1176851 Charlotte The June completion of the 750,000-square-foot 1 Bank of America Center pushed up metro-wide vacancy 160 basis points from the previous quarter to 21.2 percent; shortly before delivery, Bank of America announced that they would occupy all but two stories of the 32-story building and that they had plans to occupy floors one through 13 in the second and third quarter. http://www.us.am.joneslanglasalle.com/UnitedStates/EN-US/Pages/Charlotte-Research.aspx 45388769 21.76 0.19922225694202 0.210732284896292 73338 0.00161577415769967 324310 2050000 Chicago After six consecutive quarters of negative absorption, the CBD market reported approximately 255,000 square feet of absorption gains during the last three months. This positive absorption was fueled by not only a drop in the rate of sublease additions through the first half of the year, but also the occupancy of new tenants entering the CBD market during the quarter. Meanwhile, in the suburbs, touring and negotiations have slowly rebounded from the painfully low volumes recorded during the last several quarters. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/Chicago-Research.aspx 233241417 27.06 0.171723767691819 0.199404042817824 -443275 -0.00190049865800635 0 1215000 Cincinnati Conditions throughout the majority of the metro area are expected to favor the tenant for the remainder of 2010, and landlords will continue to offer a variety of concessions in exchange for lease commitments. Some of Cincinnati’s newer and higher demand areas, including West Chester and portions of Midtown, will likely see these growth trends return sooner than the overall market. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/Cincinnati-Research.aspx 46342537 15.5 0.159917507321621 0.169210869918494 -53665 -0.00115800738315211 825000 200000 Cleveland Despite positive economic growth, recovery in the Cleveland office market is questionable. Total net absorption was down in the Central Business District and Suburban markets, negative 23,685 square feet and negative 97,762 square feet respectively. Sublease space decreased nearly 100,000 square feet, slowing the impact of negative direct absorption on overall vacancy. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/Cleveland-Research.aspx 36391428 17.84 0.204967289545621 0.220840518842344 -22797 -0.000626438731670546 0 0 Dallas Market fundamentals were mixed in the second quarter of 2010. Dallas' net absorption remained negative in the second quarter, but 93.0 percent of all negative absorption in 2010 has been concentrated in the Richardson/Plano submarket. The vacancy rate decreased slightly as one large functionally obsolete property in the Dallas CBD was shuttered and removed from the market. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/Dallas_Publications.aspx 164312711 20.72 0.232973138639286 0.247607958948471 -914343 -0.00556465165984633 0 1590479 Denver Overall, the Denver market continues to make strides towards recovery. Lease activity remains strong, but sublease expirations and known future tenant vacancies continue to temper expectations. The recent merger of CenturyTel and Qwest Communications could pose trouble for the Denver office market. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/DenverResearch_Publications.aspx 110774536 20.11 0.150230292998023 0.165683176501863 390772 0.00352763382371559 285000 495518 Detroit Landlords continued to aggressively pursue the few tenants that were in the market; however, deal volume remained light in the Detroit region during the second quarter of 2010. Large and small companies alike awaited the recovery of major automobile manufacturers. Companies have been extremely reluctant to make any real estate decisions unless forced to do so. As a result, completed transactions continued to be limited in quantity. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/Detroit-Research.aspx 68360586 20.26 0.245748858852673 0.255120531003055 -1166185 -0.0170593183621919 0 0 Fairfield County The biggest challenge to the Fairfield office market is the absence of new demand. With the Starwood Hotels' 270,564 square-foot deal officially in place, the guaranteed presence of the high caliber tenant could help lure new tenants into the Stamford South/I-95 submarket, where there are two towers totaling 400,000 square feet slated for occupancy in the third quarter. 48586811 32.6 0.185944247297893 0.231058733202309 -402385 -0.00828177424527821 0 0 Fort Lauderdale Although the pace of job losses has significantly slowed, the office market continued to feel aftershocks from the recession as supply outpaced demand for the fifth straight quarter. Inadequate performances from the housing market persisted to be the commercial sector's largest impediment. 15200609 28.7 0.178432456225931 0.193149103433948 -188321 -0.0123890430968917 0 0 Houston Just when it seemed the Houston economy was turning the corner, several noteworthy events and announcements in the second quarter threatened to stall the economic recovery and the early signs of improvement in the office market. The list included the budget cuts at NASA, which may affect up to 7,000 local jobs, the merger between Continental and United Airlines, Chevron’s announced layoffs, and, finally, the government’s recently announced moratorium on drilling in the Gulf of Mexico, a result of the Deepwater Horizon incident. Individually, these events wouldn’t be enough to slow down the recovery, but collectively they represent a major storm that has created some real uncertainty among tenants, landlords and investors. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/HoustonResearch_Publications.aspx 152035011 25.57 0.164747101971619 0.183145547146441 -864809 -0.0056882226949686 2125093 157619 Jacksonville Market conditions in Jacksonville are expected to remain relatively soft through the second half of 2010. However, signs of recovery are beginning to emerge. Leasing activity will continue to improve and direct vacancy rates will slowly begin to stabilize by year-end. 23100021 18.17 0.206209096907704 0.214121636488835 143266 0.00620198570382252 0 0 Los Angeles Although a significant improvement from the previous year, current economic indicators continue pointing to a protracted lull in Los Angeles leasing activity through 2010, until consistent job growth resumes during the middle of 2011. Although leasing activity is not expected to pick up through the remainder of the year, most Los Angeles office markets are expected to see a decline in the amount of space hitting the market. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/SouthernCaliforniaResearchPublications.aspx 181243589 31.83 0.159915902465627 0.179556675114361 -1766301 -0.00974545367229513 767696 292989 Miami Mid-year 2010 welcomed Miami with a trifecta of market events: new deliveries in the form of nearly 1.3 million square feet, a new record high vacancy rate in excess of 21.0 percent and two years of consistent quarterly rental rate declines. Driving this race has been the CBD where three quarters of the city's under construction product over the last two years has been delivered. This is also the center of blame behind the pervasive pricing descent. 35030671 32.38 0.194601390107543 0.211476466636908 71568 0.00204300968143031 915992 1335305 Minneapolis Rental rates have continued to decline despite some increase in activity and demand. For landlords, competitive pricing along with strong positioning and a clearly articulated value proposition are critical for success in this market. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/Minneapolis-Research.aspx 147786665 23.27 0.0858148019173448 0.0880438495381163 742849 0.00502649545545939 210000 0 New York Throughout the remainder of the year, Midtown vacancy is expected to slowly drift lower, while Downtown will continue to rise. While we do not expect asking rents to bounce back, competition for the best space has already increased. Alternatively, space at the lower end of the spectrum may linger for several quarters as tenants trade-up or consolidate. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/NewYorkResearch_Publications.aspx 427658764 52.08 0.0911868603726311 0.124912482794343 1515066 0.00354269835564506 2940000 135200 New Jersey Vacancy inched higher this past quarter by 0.2 percentage points as there were five blocks of space in excess of 100,000 square feet placed on the market. Large space dispositions were concentrated mainly in Morris, Bergen, and Somerset counties where firms such as Eisai Medical, Cadbury Adams USA, and Hewlett Packard all put large amounts of space on the market. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/New-Jersey-Research-Publications.aspx 153303717 23.93 0.222982695194533 0.263673267622076 -518741 -0.00338374704900338 255000 0 Oakland / East Bay The steady increase in leasing activity has provided a sense of stability and confidence that appears to be withstanding the reality that a recovery does not happen overnight. As companies continue to evaluate real estate needs in what is still a weak economy, we can expect to see many more renewals and lease restructures through the remainder of 2010. 49507721 25.39 0.144 0.157 -342757 -0.007 0 0 Orange County Orange County vacancy rates continued to increase and rental rates inched lower for the eleventh straight quarter. Tenants will continue to have significant leverage in Orange County through at least the end of 2010, with positive pressure on rents not expected until mid-2011, at the earliest. Landlords will continue to attempt to retain existing tenants as well as aggressively pursue new tenants in the market through 2010. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/SouthernCaliforniaResearchPublications.aspx 99943515 24 0.199 0.21 -382781 -0.004 0 0 Orlando The Orlando office market experienced modest gains in the second quarter as Class A buildings absorbed over 100,000 square feet of space and the amount of sublease vacancy decreased nearly 2.0 percent. However, these gains were not enough to significantly impact market fundamentals year-to-date. Vacancy rates in the suburban submarkets remained in the upper-teens with vacancy rates in the Southwest and 436 Corridor at or near 20.0 percent. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/Orlando-Research.aspx 25892666 21.19 0.17710661837832 0.210522860573031 -216832 -0.00837426319869881 105000 55346 Philadelphia On a whole, the Philadelphia office market is stabilizing, but not yet improving. Tour velocity and related leasing activity will likely remain slow through the summer months and will likely pick up when decision makers return from vacation and the economic recovery shows signs of real traction. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/PhiladelphiaResearchPublications.aspx 138620196 23.41 0.159019389930743 0.174427483856681 -1504531 -0.0108536204926445 463515 401224 Phoenix For the first time since the fourth quarter 2006, the Phoenix office market experienced a decrease in the overall vacancy rate, albeit a slight decline from 26.0 percent to 25.8 percent. 90664323 22.51 0.235 0.246 154585 0.002 0 1187601 Pittsburgh Positive momentum throughout the Pittsburgh economy is expected to continue through 2010. Growth of major employers such as PNC, BNYMellon, and EDMC, along with the energy firms continuing to take advantage of the Marcellus Shale natural gas field, will fuel the regional economy through 2010 and beyond. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/Pittsburgh-Research.aspx 70740633 19.69 0.117800473131192 0.12347283976099 493924 0.00698218236186832 409792 102084 Raleigh / Durham Due to the large occupancy losses reported this time last year, vacancy levels increased substantially and still hover just below the 19.0 percent mark. In response to second quarter’s positive absorption total of nearly 150,000 square feet, vacancies inched downward by 40 basis points in just the last three months. http://www.us.am.joneslanglasalle.com/UnitedStates/EN-US/Pages/Raleigh-Durham-Research.aspx 41573258 20.13 0.191547653061013 0.201470498174572 22881 0.000550377841447981 94030 0 Sacramento While recent increases in leasing activity and tenants requirements have eased concerns of further market deterioration and brightened hope for some near-term improvement, the large amount of inventory added to the market since 2009 will keep pressure on landlords. Attracting new and retaining existing tenants will prove challenging, especially the prospect of State budget cuts adding to the region’s economic challenges and further shrinking the tenant pool. 44967350 23.96 0.213576434835497 0.222538177522136 -147217 -0.00327386425929035 248327 0 San Antonio Outside of the Central Business District, activity continued to increase. During the second quarter, there was 150,000 square feet of positive direct net absorption throughout suburban San Antonio, growing the year-to-date number to almost 300,000 square feet. 25100953 19.07 0.127701639814622 0.147709772770989 175942 0.00700937530140788 543402 25229 San Diego The leasing market in San Diego is steadying, but pockets of retrenchment continue. Submarkets like Rancho Bernardo and Del Mar Heights have seen increased leasing activity, while others like Sorrento Mesa and UTC continued to post significant negative net absorption. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/SouthernCaliforniaResearchPublications.aspx 82099628 27 0.171065001658716 0.183204070059855 212903 0.00259322734081085 94414 20300 San Francisco The stage is now set for performance metrics to catch up with growth expectations being driven by the innovation engine that's gearing up and being led by social media, life sciences, and software firms. Leases signed and pending occupancies provide confidence that all market fundamentals will turn positive in the second half of the year, but heavy drag from commodity space will likely weigh down performance in 2010. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/NorthernCaliforniaResearchPublications.aspx 73147683 34.74 0.158814271670095 0.1749034210694 -331641 -0.00453385515984149 205500 96416 San Francisco Peninsula The life science and biotechnology industries are doing well despite the downturn and should help office fundamentals going forward as increased venture capital funding flows and new company formations add to office demand. 27073211 33.84 0.209 0.276 -170765 -0.00630752665430044 0 0 Seattle Tenant activity has increased, yet leasing velocity remained slow. Although the second quarter was the first quarter since the 2008 financial crisis where positive net absorption was recorded, year-to-date net absorption remained negative for the Puget Sound market at 260,000 square feet. Several submarkets reported positive net absorption during the quarter and the majority of Downtown Seattle's absorption was attributed to Amazon's relocation to South Lake Union. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/Seattle-Research.aspx 101780134 21.24 0.188084761567955 0.211511957516877 -261735.7665 -0.0025715800934198 315045 1171355 Silicon Valley Renewed hiring by select large local technology firms combined with temporary hiring has sparked optimism in the commercial real estate market and lead to competitive recruiting for certain high demand skills. While unemployment remains high, stability is emerging as office-using employment has leveled off in recent months after falling by over 30,000 workers from its 2008 peak. 56877819 36.6 0.301 0.233 209015 0.00367480686979225 334433 0 St. Louis The second quarter marked the first time St. Louis experienced positive absorption greater than 100,000 square feet since the third quarter of 2008. The occupancy gains were largely attributed to the delivery of Centene Plaza. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/St-Louis-Research.aspx 46319899 19.65 0.143012808051102 0.157957242465743 23363 0.000504383655931547 470000 515426 Tampa Tenant-favorable conditions continued to exist in the second quarter in Tampa Bay's office market. Rent abatements and other tenant concessions are typical as landlords struggle to reduce high vacancy rates. The total direct vacancy rate of 21.1 percent represented a slight increase from year-end 2009 and was unchanged from the first quarter of this year. 41124746 20.9 0.211138130196212 0.221943311006497 -201944 -0.00491052273003704 88000 0 Washington, DC The catalyst for growth was broadly distributed among various government agencies, with Veterans Affairs, IRS, SEC and Health and Human Services among the most aggressive tenants in the market. The widespread growth of the government impacted the District of Columbia, Northern Virginia and Suburban Maryland alike, a unique trend given the tendency for administrations to fund only select pockets of growth in a single location. http://www.us.am.joneslanglasalle.com/unitedstates/en-us/pages/WashingtonDCResearch_Publications.aspx 325230707 34.32 0.138273840790808 0.15589999624482 1931528 0.00593894721017225 3570896 2293979 West Palm Beach Palm Beach recorded its lowest level of leased square feet since transactions began being reported over 10 years ago. Although demand slightly outpaced supply with modest positive absorption, the office sector experienced little change through the second quarter and vacancy rates continued to hover around 27.0 percent for the fourth consecutive quarter. 21212446 27.39 0.255872000805565 0.26775997449799 47115 0.00222110170604559 0 0 Westchester County The overall vacancy rate increased to 19.8 percent at mid-year compared with 17.8 percent at the close of the first quarter. The increase in the vacancy rate also surpassed the year-end 2009 rate of 18.4 percent. A more detailed look at availability, however, revealed that more than 80.0 percent of new vacant space was attributable to the return of 1 Pepsi Way (540,000 square feet, Westchester North) to the market during the second quarter. 33876624 26.207244401829 0.16992566909855 0.197690743918284 -674293 -0.0199043741784896 0 0