OFFICE MARKET SURVEY

2011 Office Market Survey

The Office Market Survey is an annual publication produced by Burns Commercial Properties in September. The Survey assesses the total Class A, B and C office space availability and occupancy in Tyler, TX. Companies interested in acquiring office space will find the survey an excellent tool for comparative research of lease rates and options. The survey can be downloaded by clicking the "download pdf" button below or can be viewed at the Burns Commercial Properties website.

OVERVIEW

Following a strong uptrend in 2010, the Tyler office market lost its momentum and experienced a slight downturn in the past year.

The annual survey of multi-tenant office buildings shows that the fifty-two properties studied are currently experiencing an occupancy rate of 86.7%, which is down from the 88.5% figure of one year ago.

The small decline did not affect the overall average asking rental rate, which stands at $14.33 per square foot, virtually unchanged from last year’s average of $14.21/sq. ft.

Most of the buildings quote a lease rate on what is known as a “gross lease” basis, which means that the Landlord is paying for utilities, janitor service, taxes, insurance, and all building maintenance. A few small office buildings have been constructed recently which lease space on a “net” basis, meaning that in addition to the quoted rental rate, the tenant must pay for utility and janitorial services, as well as its pro-rata share of taxes, insurance, and maintenance. For purposes of this survey, an estimate of the cost of these expenses is added to the asking rental rate in order to determine the total amount of the tenant’s occupancy costs.

The survey shows a growing disparity between newly constructed properties and some of the older buildings, as both the lease rates and the occupancy levels are considerably higher in the newer buildings.

There is a big gap between the “haves” and “have nots”, as twenty-six (one half of the total) properties are enjoying an occupancy rate of ninety five percent or more, while five buildings are experiencing occupancy rates of sixty percent or less. These five buildings have vacant spaces totaling 117,753 sq. ft. which constitutes forty one percent of the total vacancy in the market, which stands at 288,533 square feet.

Class A structures continue to achieve the highest occupancy rate, coming in at 93.7%, while the rate drops down to 81.4% for Class B buildings and 83.2% for Class C structures.

Large spaces are difficult to find, as the survey found that only six buildings currently offer contiguous spaces containing five thousand square feet or more.

Taylor Burns
Burns Commercial Properties

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