It was a tenants' market last year for downtown office space in most cities--including Los Angeles, San Francisco and New York--with decreasing rental rates and concessions granted to tenants, according to a survey of 12 major downtowns conducted by Colleen Rabin Associates, Beverly Hills.
Despite rental rate increases averaging 3% to 5% nationally, asking rents are lower now than they were three years ago in Denver, San Francisco, New York and Los Angeles, she said.
Generally, 1985 will continue to be a tenants' market, with only slight increases in asking rents, and effective rents as much as 30% to 40% below asking rates in soft markets, Rabin said. Rent concessions take various forms, including 12 months free rent on a five-year lease, upgraded tenant improvements and paid moving expenses, she added.
The largest increases in the higher range downtown rents were experienced in Chicago, 25%; mid-town Manhattan, 15%; Washington, 13%, and Orange County, 11%, she added.