Surging Rents
This article in last Thursday's Wall Street Journal was overshadowed by the story on sleazy mortgage brokers. I guess the prediction of a commercial real estate slowdown was premature. The article has an interesting point in that private equity owners can wait for higher rents while public REITs have to keep occupancies high due to their quarterly reporting requirements (and the negative perception of high vacancy), and therefore sacrifice high rents for high occupancies. Either way its good for all the TIC deals done over the past several years because they need rent growth.

Another point in the article is that the downtown condo boom in many cities has prevented office construction that is also driving up rents. San Diego is a classic example of this. Only one office building has been built downtown since the early 1990s and the number of high rise condos are too numerous to count. (Wouldn't it be cool if there was a trading vehicle that allowed you to go long on office space and short condos.) If you work in New York for a company whose lease is expiring, you better familiarize yourself with the PATH schedule.