Commercial Offers - The next bubble to burst

News headlines across major U.S. cities vacant commercial grade record, with a decrease in the price charged for the rental of commercial space. As was expected by many statisticians to go ahead earlier this year, the next bubble to burst is commercial property.

Based on statistics compiled by Cushman & Wakefield (C & W), the commercial vacancy rate has not been this high since mid-2005. C & W, a global commercial real estate brokerage and consulting, has found that vacancy rates rose in 24 of the 32 major markets they studied.

Colliers International, a global commercial real estate service provider, noted that the rental office space is more plentiful. Nationally, vacancies in the offices of major business districts jumped from 12.5 to 13.74 percent in the second quarter of 2009. Suburban markets rose 1.95 percent to 16.28 percent. In addition, the company noted that the rent charged in major districts fell 3.2 percent during the quarter averaged $ 38.25 per square foot. Average rents in American cities demanding the whole, however, are now mostly priced at around $ 25.00 per square foot.

Both companies noted that the market has been pummeled by increased supply and reduced demand due to economic slowdown. Executive Managing Director Maria Sicola said that the figures of unemployment translate into lower demand reflected in vacancy rates higher. Over 66% of the 6.5 million square feet of newly built commercial space was still vacant at the end of the second quarter of 2009.

Michael Cohen, a strategist of research for the Property and Portfolio Research (PPR), said that pending the company was that vacancies will reach historic highs in the office, apartment and storage space in 2009. According to ING Clarion Real Estate CEO David Lynn, the hotel market has been dealt the greatest blow of reduced business and leisure travel.

Most cities across the country are experiencing a rise in commercial vacancies. Phoenix has a 17.4 percent vacancy, Chicago is at 15.4 percent, Washington, DC, holds a rate of 11.7 percent, Las Vegas is more than 20 percent, Kansas City is over 18 per cent, Providence, Rhode Island is now over 30 per cent, and so on.

With the increase of jobs commercial insurance companies are increasingly concerned about the liability of vacant properties. Holidays present additional risk does not apply to properties occupied. Commercial Insurance Companies encourage owners of vacant buildings to minimize risk by implementing the following:

* Notify the insurance company vacancy, to be informed and follow the political conditions that apply to vacant property.
* Advise local authorities that the property is vacant.
* Remove all combustible debris and unnecessary materials from vacant property.
* Inform local fire departments of materials that could impair left fire.
* Inspect the property per week, have someone monitor the ownership or lease of a storage service to drive by daily to respect the property.

With the number of vacant property should not emerge for some time to come, it is wise counsel indeed.