AgdaPkt 2005-10-24 - Laserfiche WebLink

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CB RICHARD elLIS CONSULTING Sedway Group $41' CBRE CB RICHARD ELLIS per worker analysis above. The adjusted regression predicts a total of 5.2 million square feet of net absorption for the five-year period beginning 2005, with a corresponding decrease in vacancy to 11.2 percent by 2010. Based on these analyses of office employment forecasts and the historic relationship between office employment and net absorption, CBRE Consulting believes office demand in the SFP market could total between 8.2 and 10.4 million square feet from 2005 through 2015. Coincidentally, this level of potential absorption for 2005 to 2015 is comparable to the existing level of vacant space (9.9 million square feet) in the SFP market. This suggests that the absorption of existing vacant space in the market will require the passage of some time, and more than just a few years. Several factors will prevent SFP absorption from returning to the record high levels seen in 1998 and 1999, including the presence of a significant amount of shadow space and the off-shoring of jobs, particularly those in the information technology sector. Still, with the SFP office market's volatile history, there is potential for a sharper-than-expected uptick in demand in the next five years, as well as for another cyclical downturn within the ten-year time frame. Figure 1 San Francisco Peninsula Office Market Forecast 4,000 35% ° 30% 3,000 ~ 2,000 0 0 := 1,000 Q Q u. Q ... ~ ::¡ ¡¡; -1,000 25% 20% ~ c: ~ c.> 15% co > 10% -2,000 5% -3,000 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ,,~ ,,~ ,,~ r\-'5 rfS rfS rfS ~'¡J r\-~Ç:j ~'5 ~~ r\-~'¡J ~çs ~" I-New Supply _Net Absorption -SFP Vacancy I 0% Source: Costar and CBRE Consulting forecast. Redwood City The combination of weak demand and high vacancies in Redwood City, together with the availability of quality space in other, more desirable Peninsula and Silicon Valley locations, will cause the submarket to lag the overall SFP recovery.