Wednesday, December 28, 2005

Office Mania

So the SLC office market is down to a 10.8% vacancy rate. Time to throw up new towers. 720,000 sf presently under construction, and another 1.2 million sf expected to be started by the end of 2006. Is that much new business moving in? Nope. It's mostly current businesses feeling flush and moving into new space, which means that vacancy rate will be going up, and we'll have a fresh crop of office slums.

Wish I had an office lease with 1-2 years left on it. Property managers were already banging on me last Summer to get access to my clients and contacts. Sorry, I'm sitting tight right now and waiting for all the cock-eyed optimists to build themselves into another world of hurt (How much variable-rate debt is financing these projects? Do we honestly think the Fed will do the sensible thing and stop jacking up rates before it's too late? After the yield curve inversion started uninverting already today?). In a couple of years, there may be some historic office buildings you can snap up on the cheap, and then you can OWN your office.

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