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Commercial Office Market Shouldn't Suffer
April 23, 2010

The housing bubble that let to the Great Recession and is still holding the economy back has no parallel in the commercial office market, a report in the April 19th issue of The Zweig Letter, reveals.

The main reason, American Institute of Architects Chief Economist Kermit Baker told The Zweig Letter, is that the non-residential market in general didn’t fall victim to the speculative overbuilding that led to the housing bubble.

While demand for office property is scant now-leading to high vacancy rates and falling rents-as the economy recovers and employment picks up, that market will likely bounce back quickly.

For architecture and engineering firms working in the office market, the lack of demand has meant mostly “paint and carpet jobs,” as renters stay put and landlords try to retain them. Moreover, firms have started looking beyond their comfort zones to secure backlog.

Gary Kirkbride, senior vice president with the Infrastructure Engineering Services practice at Dewberry in Fairfax, VA, told The Zweig Letter that the office market is still dormant, with demand for upfront site services such as feasibility studies, planning, rezoning, and building permits remaining weak.

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