A growing spread between starting and effective rents illustrates how office landlords — even among coveted Class A buildings — are seeing their rental income eroded as the office market remains squarely in favor of tenants.
It represents another challenge facing the office market, which continues to see depressed leasing activity and rising vacancy, including from sublease space.
New York commercial real estate data and analytics company CompStak Inc. found, since the end of 2019, Class A effective rents in office space across markets it analyzes are up 1.4% while starting rents are up 4.5%. Starting rent is the rate at which a lease is signed while effective rent represents the rate after concessions are factored in.
*Article courtesy of Philadelphia Business Journal
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