Getting Warmer: EOP Drops Redwood Shores Rents Again
May 28, 2009
We’ve spent some time in the past discussing the Redwood Shores as a sort of case study. We originally discussed the Redwood Shores submarket back in January of 2008 when we indicated that rent hikes in Redwood Shores were nothing more than hype, driven mainly by Equity Office.
Let’s look at that market again. For the sake of consistency, let’s use 201-203 Redwood Shores Parkway, where rents zoomed to over $5.00 psf/ full-service at one point.
Since that time, Equity Office has been on a fairly aggressive campaign to get its space leased and has been fairly good at working its rents back to levels that more accurately represent reality. In January of 2009 we updated that EOP had dropped rents at some of its Redwood Shores properties, including 201-203 Redwood Shores Parkway to $3.65 psf/full-service.
Again in March of 2009 they decided to make some additional cuts. 201-203 Redwood Shores were part of the cuts, and made there way down to $3.35 psf/full-service. I indicated that the cuts would not be the last and they had a ways to go. I still suspect they will need to make some more cuts barring any dramatic reversal in unemployment numbers.
Now Equity Office has cut rents again. This time, rents at 201-203 Redwood Shores are down to $2.95 psf/full-service, representing a 45% cut from the peak, and some 20% year-to-date alone.
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Wow that is some drop. Does that represent the bottom or what.
getting close….
Man, if you signed a least @ $5/ft how pissed would you be right now?
pretty pissed I’d say. I’d also hope they’d be looking for a new broker next go around if they were at all advised that anything north of $3.50 full-service was “market” at anytime during this last run up.