Housing Bubble Shouldn't Harm Office Market
A slow housing market is unlikely to bleed into the office market and cause the office market’s recovery to slow, according to a new analysis from Grubb & Ellis Company.
A slow housing market is unlikely to bleed into the office market and cause the office market’s recovery to slow, according to a new analysis from Grubb & Ellis Company.
The tech bubble of 2000 dragged the economy into a recession in 2001, leading to a negative absorption of office space. Such a development is unlikely to occur regarding a housing bubble because the housing market makes up a smaller percentage of the office market, according to the analysis.
At its peak in 2003, housing-related tenants accounted for 8 percent of total office leasing activity versus a peak of 22 percent for tech-related tenants in 2000, according to Grubb & Ellis. Housing-related tenants account for 5 percent of total office leasing activity to date, the company notes.
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