This article is from the Australian Property Journal archive
DESPITE tenants been increasingly hesitant to make commitments, Tishman Speyer Office Fund has maintained a 93.7% occupancy rate in the September quarter – slightly below 93.9% in the June quarter.
TSO said the third quarter of 2008 heralded significant volatility in world financial markets as concerns intensified over the condition of the US, UK and European economies and the health of the global financial system.
“While this level of financial uncertainty has resulted in tenants across TSO’s markets becoming increasingly hesitant to make commitments to real estate, TSO has continued to make progress with its leasing program,” the fund said.
During the quarter, TSO signed 23 leases covering 130,800 sqft of office space. Since September 30, the fund has secured two significant leases in San Francisco for 43,800 sqft and 17,000 sqft.
“While the effect of the current economic conditions on office market fundamentals continues to evolve, it is apparent that tenants in the financial sector have to date been the most affected,”
TSO said it has no exposure to Lehman Brothers, Bear Stearns or Washington Mutual and has 10,000 sqft of exposure to Merrill Lynch (at Bala Plaza), 16,700 sqft of exposure to Wachovia (via AG Edwards at 520 Pike Tower) and 32,600 sqft of exposure to AIG (27,000 sqft at 520 Pike Tower and 5,600 sqft at 3 MacArthur Place) all of whom remain current on their rent obligations.
Australian Property Journal