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News release

Dallas

Climbing Sublease Space and Decreasing Net Effective Rents Create Opportunities for Tenants in Dallas

Jones Lang LaSalle research expects stimulus package to help select markets and sectors


DALLAS, March 10, 2009 – Facing the strain of rising sublease space, U.S. landlords in all major markets are likely to battle continued declines in leasing activity and rental rates throughout 2009, according to Jones Lang LaSalle’s Sublease Data.  However, these dynamics will create opportunities for credit-worthy tenants. In Dallas-Fort Worth, sublease space reached nearly three million square feet in the fourth quarter, according to Doug Carignan, Senior Vice President, Jones Lang LaSalle.
 
“Even though we’re seeing a significant amount of sublease space added to the market, we expect a steady stream of transactions through 2009,” said Carignan. “Tenants are taking advantage of the significant bargains and flexible leasing options, in particular shorter term leases and built-out space.”
 
From the national perspective, Jones Lang LaSalle research showed sublease space reached nearly 56.4 million square feet in 24 metropolitan markets in the fourth quarter of 2008. Sublease space has climbed 28.5 percent since second quarter 2007 when the credit crisis began and will jump further in the coming months as corporate America's more recent job cuts trickle down to commercial real estate. Specifically in the Dallas-Fort Worth area, Jones Lang LaSalle’s data shows that the market is nowhere near the historical highs of sublease space on the market during the last downturn (2001-2004); however, experts agree that more space is expected to come online during the second half of ’09.
 
“The last downturn forced the telecom industry to place very large blocks of sublease space on the market whereas today’s sublease market is typically driven by smaller availabilities from service firms such as mortgage companies and financial institutions,” said Steve Thelen, Managing Director, Jones Lang LaSalle.
 
“The difference between this economic downturn and the last one is that good deal flow still exists in the market,” said Carignan. “As the only full-service real estate firm that has a dedicated team focused on assisting clients with this specific type of space, our goal is to stay proactive and help our clients maximize the opportunities that are out there.”
 
In addition, President Obama’s stimulus package is expected to infiltrate into the economy in the second half of 2009. Based on Jones Lang LaSalle research, the package is expected to infuse consumer spending and create some residual growth in the commercial real estate sector in 2010.
 
About Jones Lang LaSalle
 
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2008 global revenue of $2.7 billion, Jones Lang LaSalle serves clients in 60 countries from 750 locations worldwide, including 180 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.3 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with more than $46 billion of assets under management. For further information, please visit our Web site, www.joneslanglasalle.com.
 
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