Skyline of the banking district in Frankfurt, Germany
Skyline of the banking district in Frankfurt, Germany - 
Listen To The Story


JEREMY HOBSON: Now to a potential rebound in the market for office space. The property research company Reis says last quarter office rents rose for the first time since 2008. And the amount of occupied office space also jumped.

Let's get some reaction from Juli Niemann, an analyst at Smith Moore and Company. She's with us live. Good morning, Juli.

JULI NIEMANN: Good morning Jeremy.

HOBSON: So do you see a rebound in the office space commercial real estate sector here?

NIEMANN: We didn't have apocalypse part two like everybody was expecting with the real estate bubble here. Housing basically had lackful lending, huge optimism, commercial real estate you got more longer term pension funds, insurance companies, and a lot of that debt has been restructured. So it didn't fall far, and it's coming back, especially in prime areas -- A, B, and C spaces.

HOBSON: A, B, and C spaces. What do you mean by that?

NIEMANN: Downtown is where everybody's going now. The A space, that's highly visible, modern, updated, good leasing packages. The banks of financial companies have been moving down there. They delayed this over the last couple of years to squeeze in another desk. That's where you're seeing this good resurrection in properties. The B spaces are glass office buildings along the highways. Who are there? Those are the mortgage lenders, home builders -- they're dead. That's going to be very slow in coming back. And the strip malls? Well those are 25 years old, no renovation, you just have flee markets there, and skateboard areas. So they're perfectly dead. The investment is coming back in the A space and that's where the resurrection in office buildings are coming.

HOBSON: Are you in an A space Juli?

NIEMANN: I'm here in the basement at home.

HOBSON: Juli Niemann, analyst at Smith Moore and Company, thanks.

NIEMANN: You bet.