Article provided byCarmen R. Austin, MBA, CCIM, Associate Broker for Saurage Rotenberg Commercial Real Estate

High-Occupancy Class A Buildings Outperforming Low-Occupancy in Pricing, Absorption, Rents

Written by Mark Heschmeyer, [December 1, 2010]

Despite the common perception that investors are bidding up prices for any major Class A office building brought to market, an analysis of recent sales activity finds a decided risk aversion to high vacancy among Class A office investors.

Call it an occupancy premium or cash flow premium, but investors appear very discerning in what they are willing to spend. Just as there is a clear bifurcation in the office investment market between core and noncore properties and markets, there also appears to be a clear bifurcation among core Class A office properties.

Values for Class A office properties with low occupancies and their related lease-up risk remain under pressure…

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Carmen has been a practicing commercial real estate broker since 2001. She is a graduate of the Louisiana State University (LSU) E.J. Ourso College of Business and the LSU Flores Masters of Business Administration (MBA) Program with a specialization in Entrepreneurship and Real Estate Finance.  Her experience includes past employment as Regional Director of Leasing at Commercial Properties Realty Trust the for-profit arm of the Baton Rouge Area Foundation. Carmen’s affiliations include Louisiana REALTORS®, Greater Baton Rouge Association of REALTORS® Commercial Investment DivisionInternational Council of Shopping CentersCommercial Real Estate WomenCertified Commercial Investment Member InstituteNational Association of REALTORS®, and Urban Land Institute. She is also an active volunteer on the board of directors for the Baton Rouge GalleryLSU MBA Alumni AssociationJunior Achievement of Baton Rouge, and the Junior League of Baton Rouge.  Carmen currently serves as the 2010 President of the Louisiana CCIM Chapter

Saurage Rotenberg Commercial Real Estate is a member of the Baton Rouge Area Chamber of Commerce (BRAC); the West Baton Rouge Chamber of Commerce; the Baton Rouge Growth Coalition; the Baton Rouge Better Business Bureau; the Louisiana Commercial Data Base (LACDB); and the International Council of Shopping Centers (ICSC). Several agents, on an individual basis, are members of the Society of Industrial and Office Realtors® (SIOR), the Certified Commercial Investment Member Institute (CCIM); the National Association of REALTORS® (NAR); and the Greater Baton Rouge Association of REALTORS® Commercial Investment Division (CID).