A STILL VERY HOT OFFICE MARKET

Office property rents jumped Q2 2007, even as the residential real estate market continues to show signs of weakness, according to data from Reis Inc. and ZipRealty Inc. Effective office property rents gained 3.1% in Q2 -- their sharpest increase in seven years -- following 2.8% and 2.1% gains in earlier periods according to the Reis report, to be released today. The office-vacancy rate of 12.7% is at its lowest level in six years, a sign the economy is producing more office jobs, says Reis's chief economist Sam Chandan. In particularly strong markets, rents are up 20% and more over the past year, as big-name companies like Blackstone and Morgan Stanley continue to build large stakes in the market.

Additionally, after years of flying under the radar, medical office buildings are emerging as an attractive commercial real-estate asset, thanks to strong fundamentals and sky-high prices for other types of properties.

Medical office buildings, or MOBs, represent a tiny niche of the broader office-building sector. They have often been overlooked not only because they lack the pizazz of gleaming skyscrapers, but because their complex operating structures can scare off traditional office investors, analysts say.

Now, with so much capital chasing all types of commercial real estate, "MOBs have become more mainstream...and a growing number of capital providers are now investing in the sector," says Jim Sullivan, an analyst at Green Street Advisors, a real-estate research firm in Newport Beach, Calif.

One can participate with Wells Reit II or with an Office Condo.

And, NYC Real Estate as hot as ever:

• Manhattan Co-Op Prices Fall as Buyers Favor Condos [Bloomberg]
• Manhattan apartments brush off U.S. housing slump [Reuters]
• Co-ops Slip, but Condos Lead Rise in Manhattan Apartment Prices [NY Times]
• New York home prices: No place but up [CNN/Money]
• WALL ST. FUELS RUN IN APT. SALES [NY Post]
• Manhattan apt. sales rise [NY Daily News]
• Weak Dollar Fuels City Real Estate [NY Sun]
• NYC a Bright Spot in Dismal U.S. Real Estate Market [TheStreet.com]

New York Building's Record Price Shows Office Market's Strength
from the WSJ, reports that investors will pay $1,589 per square foot, or $510 million, for Manhattan's 450 Park Ave. The deal is believed to be the most expensive on a per-square-foot basis for a U.S. office building.

Housing Bubble and Real Estate Market Tracker from SA for 7/5