Office Costs Seen Falling in Key Markets

The cost of office space will continue to fall this year in key West Coast markets such as Seattle and Silicon Valley, and to a lesser extent in New York, according to real estate services firms Grubb & Ellis Co., New York, and Knight Frank, London.Office space costs are projected to decline 6.1% in Seattle, 5.8% in San Jose, Calif. (the capital of Silicon Valley), and 2.6% in New York. Meanwhile, the companies' 2003 Global Real Estate Forecast sees costs rising significantly in such foreign cities as Bangkok, Thailand (up 6%); Adelaide, Australia (up 5%); and Shanghai, China (up 5%). "One of the key reasons we plan on conducting this study for years to come is that the real estate cost -- which for most companies is the second-highest cost of doing business, behind human capital expenses -- is moving out of the classification 'necessary evil' and into the boardroom as a significant planning consideration for global expansion," said Bob Bach, national director of market analysis at Grubb & Ellis. The companies can be found online at http://www.grubb-ellis.com and http://www.knightfrank.com.