Can Downtown Survive?

[JaxNative68]

However, when you look at the huge office tower that they manage in that very same sub-area that they claim carries a 25% vacancy rate, the actual vacancy rate they are experiencing in their own space is in fact 90%.

you mean the huge office tower with 10 floors and 95,000 square feet of total space?

100k leasable square feet in one spot is really rather large for this area, Tufsu...

As a case in point, that is twice as large as Cushman & Wakefield's next-largest listing in all of Duval County.

I know a couple of developers that have multiple buildings with 100,000sf available.  It isn't very surprising.  The average office building has a floor plate of 25-30,000sf.  It doesn't take many vacant floors to add up to 100,000sf.

[ChriswUfGator]

Ah... I see... you are simply interpreting them differently or doubting the veracity or accuracy of their reports?

The problem is that, on one hand, this company is claiming a 25% vacancy rate in the Northbank section of downtown, and then on the other hand when you actually look through their listings, the office space they manage in that same area is running roughly a 90% vacancy rate.

This contradiction is all from the same source, Cushman & Wakefield.

Naturally, Tufsu is disingenuously trying to keep one part and ignore the other.

[tufsu1]

Actually, it is quite large.

I guess so...if you consider 1.3% of the downtown office market large

[ChriswUfGator]

However, when you look at the huge office tower that they manage in that very same sub-area that they claim carries a 25% vacancy rate, the actual vacancy rate they are experiencing in their own space is in fact 90%.

you mean the huge office tower with 10 floors and 95,000 square feet of total space?

100k leasable square feet in one spot is really rather large for this area, Tufsu...

As a case in point, that is twice as large as Cushman & Wakefield's next-largest listing in all of Duval County.

I know a couple of developers that have multiple buildings with 100,000sf available.  It isn't very surprising.  The average office building has a floor plate of 25-30,000sf.  It doesn't take many vacant floors to add up to 100,000sf.

We're talking urban highrise, in a CBD. It's its own animal.

[Captain Zissou]

Ah... I see... you are simply interpreting them differently or doubting the veracity or accuracy of their reports?

The problem is that, on one hand, this company is claiming a 25% vacancy rate in the Northbank section of downtown, and then on the other hand when you actually look through their listings, the office space they manage in that same area is running roughly a 90% vacancy rate.

This contradiction is all from the same source, Cushman & Wakefield.

Naturally, Tufsu is disingenuously trying to keep one part and ignore the other.

Maybe Cushman just stinks at getting space filled.  See what CBRE, Hallmark, Eola, Gate, and others vacancy rates are.  Unfortunately, I doubt they'd be so easily deteminable.

[ChriswUfGator]

Ah... I see... you are simply interpreting them differently or doubting the veracity or accuracy of their reports?

The problem is that, on one hand, this company is claiming a 25% vacancy rate in the Northbank section of downtown, and then on the other hand when you actually look through their listings, the office space they manage in that same area is running roughly a 90% vacancy rate.

This contradiction is all from the same source, Cushman & Wakefield.

Naturally, Tufsu is disingenuously trying to keep one part and ignore the other.

Maybe Cushman just stinks at getting space filled.  See what CBRE, Hallmark, Eola, Gate, and others vacancy rates are.  Unfortunately, I doubt they'd be so easily deteminable.

Wait a second, so Tufsu, you, and everyone else agreed that this was THE "premier" real estate services firm, yada, yada, yada. Now when an obvious flaw in their published literature was pointed out, we can't make excuses for them like maybe they're just bad at what they do...

This is THE premier RE firm, right? By everyone's own acknowledgement here, they can't suck...

[ChriswUfGator]

Actually, it is quite large.

I guess so...if you consider 1.3% of the downtown office market large

Oh another Potemkin Village, yay...

So let's see those stats Tufsu...then we can start stripping out all the government offices etc., that are no doubt included in that figure but shouldn't be. Then we can back out all the square footage that has been demolished since your stats were compiled. Then we can back out all the square footage that has been converted to residential or other uses since your stats were compiled (11E, the Barnett Building, Metro Lofts, etc.). Then we can back out all the space that may technically be zoned for commercial, but is in completely unuseable condition (the laura trio, etc.).

Let's see how that stat looks when we take the lipstick off the pig...

[JaxNative68]

the amount of demolished office space downtown, wow, i would love to see that stat factored in.  But after I saw it, I'm sure I would hate it.

[ChriswUfGator]

Ah... I see... you are simply interpreting them differently or doubting the veracity or accuracy of their reports?

nope...I think they are both accurate...one is a listing for a signle buidling downtown...the other is a market research report on the entire Jax. office market

Nice try, but no. I'm only calling into question the truth of the portion of the C&W report that claims the Northbank has only a 25% vacancy rate, since that's what we're discussing in this thread. I don't care about, nor am I questioning, the remainder of their statistics that would apply to the whole City of Jacksonville, as you just implied. And I find that 25% figure hilarious, when their own highrise in that same sub-area is running a 90% vacancy rate.

[Captain Zissou]

I have said all along that their numbers are probably pretty close to true.  If they claim 25%, I doubt it's higher than 27 or lower than 22.  I agreed it's not gospel, but the analyst would be fired if it was grossly inaccurate.  I have also already said that if those numbers are true, that doesn't mean that there can't be a 100,000 sf office bldg that is 90% vacant.  

There is a difference between a analyst's market analysis, and a broker's ability to lease space.  I have never said that Cushman was the 'premier' firm.  I think locally CBRE is the best.  Nationally I'd say Marcus & Millichap is far stronger than Cushman, and they used to be locally as well.  That doesn't mean their analysts can't whip up an accurate report.  That's their job.  

I haven't taken a side this whole argument.  I have just added my opinions.  If you can find inconsistencies in my argument, I'll happily address them.

[ChriswUfGator]

I have said all along that their numbers are probably pretty close to true.  If they claim 25%, I doubt it's higher than 27 or lower than 22.  I agreed it's not gospel, but the analyst would be fired if it was grossly inaccurate.  I have also already said that if those numbers are true, that doesn't mean that there can't be a 100,000 sf office bldg that is 90% vacant.  

There is a difference between a analyst's market analysis, and a broker's ability to lease space.  I have never said that Cushman was the 'premier' firm.  I think locally CBRE is the best.  Nationally I'd say Marcus & Millichap is far stronger than Cushman, and they used to be locally as well.  That doesn't mean their analysts can't whip up an accurate report.  That's their job.  

I haven't taken a side this whole argument.  I have just added my opinions.  If you can find inconsistencies in my argument, I'll happily address them.

I wasn't picking at you, more digging at Tufsu...

But let me ask you this, then. Is it wrong for me to have an issue with a company continuing to distribute a report claiming a certain vacancy rate, when they know from their own market participation in that same region that conditions have subsequently worsened?

Is is wrong of me to have an issue with a company including variables in their statistics that yield a given occupancy rate, when they know from their own market participation in that area that the conditions they are personally experiencing are actually far worse than what they are publishing?

You know if I did this while trading stocks, I'd be sued and/or go to jail...

[JC]

Again, people living, eating, sleeping, downtown!

[finehoe]

I...the analyst would be fired if it was grossly inaccurate.

Sort of like when the analysts at S&P or Moody's were "fired" for rating Mortgage Backed Securities as AAA when they were really worthless pieces of shit?

[Captain Zissou]

Chris;
Yes, This would be a false representation, but only if the vacancy rate is in fact from 2 years past as you believe.  

I agree that public sector office space should not be included, which would increase the vacancy rate.  I also think single tenant buildings like CSX or FNF should be removed, or at least explained.

Until a private sector vacancy number and a timeline for the analysis can be determined, I don't think there's really much to argue on.  Tufsu has an accurate number, but nobody knows what it is made up of.  

[fieldafm]

I requested the details, maybe I'll get that tomorrow(with the 10 year treasury so low, this is the busiest ive been in 6 months).  The .pdf online simply shows occupancy rates as a pct of leasable sq footage.  It's absolutely correct, but it's only correct depending on how you view the numbers.  Say you have a building on the Southside that is 3 stories at 100k sq ft, and one company... say Deutsche Bank(they are in Merridian in single story buildings, so Im just using them as a hypothetical).  Say Company D Bank(in a more generic sense) leases out that entire building and has 650 employees in that office, but say floor #2 is half empty... well, that's counted though as fully leased space.  So as a percentage that building is leased at a 100% occupancy rate, but they could easily fit 1k employees in that space.

Cushman is not the dominant mgmt company downtown... so saying that they have a building that is 90% available and then saying 'well there's no way 26% vacancy rate is correct, all downtown must be 90% vacant then' is as far stretched as far streched can be, lol.

The ~26% Northbank vacancy rate is correct according to Cushman's numbers(the analysts would be just like the accountant at your business, they don't fudge numbers b/c someone over in sales walked over and told them to make the sales guys look good) but as I explained above, that doesn't tell the whole story.  There is probably significant underutilization within that top line figure.  The entire country is underutilized right now in about every metric you can come up with!

Stephen shocked me once by quoting the JEDC official's 6k Northbank claim.  To me, that seems VERY low... that's why I want to see more details.  I'm glad I'm busy, but I kinda would like more time to research that number further.  I plan to when I have the time to do so.