Commercial rents to stabilize as new supply arrives: WSJ report

The Wall Street Journal reported last week that sharp rent increases in high-tech cities might be a thing of the past, as new office supply opens up and job growth slows.

“The largest [rent] slowdowns are being seen in major East Coast cities such as New York, Boston and Washington,” the paper reports.

Maybe the most vital paragraph came from a real estate industry analyst.

“We see no reason why the office markets are going to start delivering rent growth at a more meaningful pace,” said Jed Reagan, a Green Street analyst, in an interview. “If anything, we think as the decade wears on, job growth is likely to slow down a little bit and supply growth is expected to pick up a bit.”

Cheaper office rents could be a good thing for startups, which often need every dollar of capital they can come by. But if rent growth flattens out, or even falls (is that possible?), that could have a dampening effect on the Brooklyn startup scene, where one of the top selling points is cheaper rent than Manhattan.