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National Airport-Area Office-Warehouse Rental Rate Survey Ed Riggins, CCIM Executive Vice President ACI-NA March 29, 2007.

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Presentation on theme: "National Airport-Area Office-Warehouse Rental Rate Survey Ed Riggins, CCIM Executive Vice President ACI-NA March 29, 2007."— Presentation transcript:

1 National Airport-Area Office-Warehouse Rental Rate Survey Ed Riggins, CCIM Executive Vice President ACI-NA March 29, 2007

2 The 7-10-Year Real Estate Cycle Low vacancies Increasing prices and rents Accelerated new construction Oversupply High vacancies Declining prices, rents, construction Absorption of excess supply

3 City Inclusion Criteria Heavy cargo traffic per ACI Presence of airport related functions per D&B forwarders expedited truckers airline parts suppliers

4 Survey Property Criteria 3 properties per city – average of net asking rates 4th quarter data collection Dock high truck doors Off airport-owned property but, w/in 5 miles Sized for hypothetical user 20,000 sq. ft. 20% office finish

5 2007 Rental Rate Survey Results

6

7 2001 – 2007 National Average

8 Lessons Learned Subleases at 20-50% off in for months Some new development by Expenses now 10-25% of rental costs Leases more net – mgt. fees, roof/parking repair, etc. Free rent still preferred to rate reduction Cap rates down from 9-10% on 2000 to 5-6% now For tenants - More time = more choices = more leverage

9 How Properties Are Valued Net Income Sales Price Capitalization Rate =

10 How Properties Are Valued $6.5 per sq. ft $100 per sq. ft 6.5% =

11 How Properties Are Valued $6.5 per sq. ft $108 per sq. ft …this goes up If this goes down… 6.0% =

12 The 7-10 Year Real Estate Cycle Low vacancies Increasing prices and rents Accelerated new construction Oversupply High vacancies Declining prices, rents, construction Absorption of excess supply Didnt happen

13 The 7-10 Year Real Estate Cycle Here Now? Low vacancies Increasing prices and rents Accelerated new construction Oversupply High vacancies Declining prices, rents, construction Absorption of excess supply


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