Rent’s on the rise
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SCOTT JAGOW: Yesterday we told you that private equity firm Blackstone Group would buy the country’s biggest office building company. But then we got to thinking, isn’t this a bad time to own property? Stacey Vanek-Smith reports.
STACEY VANEK-SMITH: We’ve heard a lot about the rough ride the real estate’s been having. That’s true for residential housing, but as far as commercial real estate’s concerned, it’s been smooth sailing.
This year, new home sale prices have been down more than 10 percent compared to last year. At the same time, office rents have jumped an estimated 6 percent nationwide for cut-throat markets like New York, that number is as high as 15 percent.
And then there’s the apartment rental business.
Lou Taylor is a real estate analyst for Deutsche Bank.
LOU TAYLOR: We’ve had rising rents and rising occupancy rates. You know, people that are nervous about the outlook for single-family homes have delayed purchases and stayed in apartments longer. Plus there’s been a real dearth of new apartment construction, so the apartment business is very, very good.
Analysts predict demand for office space will continue to grow as long as the economy expands.
As for apartments? As long as interest rates don’t drop, analysts expect rents will continue to rise.
I’m Stacey Vanek-Smith for Marketplace.
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