What a difference 6 months makes

By Hoss MacVaugh, Owner/Broker, MacVaugh & Co. Commercial Real Estate

As of our last report the Class A buildings in Pasadena had raised rates by about 50% from $2.50 to $3.75 with callous disregard to renewing tenants. The choices at the time were limited. According to some data, Pasadena was faced with a 4-5% vacancy. The choices were to stay and pay or move to the surrounding cities. We predicted at the time that there would not be a significant softening in rates due to the financing structures of the purchases. The Lenders simply would not allow it. We further suggested that we would probably see the vacancy rate go up due to tenant flight to surrounding markets.  

So what has happened to the Pasadena office market between November 2007 and May 2008?