prime office market report - servicios inmobiliarios ... · brazil –rio de janeiro 19 chile -...
TRANSCRIPT
JLL Research
Latin America | EY 2016
Latin America prepares for a new political
reality that will affect some countries more
than others.
Main office markets are seeing peak
production which has led to falling rents,
though this has stimulated demand in
many cities.
Office
Contents
Office Market Overview| Latin America | EY 2016
Introduction 3
Market Snapshots
Argentina – Buenos Aires 17
Brazil – São Paulo 18
Brazil – Rio de Janeiro 19
Chile - Santiago 20
Colombia - Bogotá 21
Colombia - Medellín 22
Colombia - Cali 23
Colombia - Barranquilla (and Caribbean) 24
Costa Rica – San José 25
Ecuador - Quito 26
Ecuador - Guayaquil 27
Guatemala – Guatemala City 28
Mexico – Mexico City 29
Mexico – Monterrey 30
Mexico – Guadalajara 31
Panamá – Panamá City 32
Peru - Lima 33
Puerto Rico – San Juan 34
Uruguay - Montevideo 35
Venezuela - Caracas 36
Appendix: 37
Contacts 41
Introduction
3
Location Map
Market ClockMontevideo
Buenos
Aires
Santiago
Rio de
Janeiro
Lima
Bogotá
Monterrey
Mexico City
Guadalajara
San José
Panamá
City
Caracas
GuayaquilQuito
Medellín
San Juan
Cali
São Paulo
Barranquilla
Guatemala City
Santo Domingo
Colombia Caribbean
Rents
Falling
Rental Growth
Accelerating
Rents
Bottoming Out
Rio de Janeiro, San Juan, Guayaquil
Rental Growth
Slowing
San José, Guadalajara
Cali
Quito, Panamá City
Santiago
BogotáMedellín
Monterrey
Buenos Aires
Montevideo
São Paulo, Guatemala City
Mexico City
Lima
Caracas
Office Market Overview| Latin America | EY 2016
Introduction
4
Latin America in 2016
In a year when much of the world turned inward, Latin America increasingly looked outward. This is evidenced
by a shift in the political pendulum in several countries: in Brazil, where the impeachment of Dilma Rouseff paved
the way for the more centrist Michel Temer; in Argentina, where Mauricio Macri looks to re-establish access to
international debt markets; in Colombia, where the FARC guerillas are exchanging weapons for registration as a
political party; in Peru, where voters refuted Fujimorismo and opted for Kuczynski´s center-right approach; and in
Ecuador, where the outcome of a 2017 election could reverse the policies of Rafael Correa.
In many ways the region remains vulnerable to events outside its control. Higher interest rates in the United
States have redirected capital flows to the detriment of Latin American, while falling commodity prices have hurt
exports. The result has been a significant decline in terms of trade, which has hurt fiscal revenues, weakened
exchange rates, and cost jobs.
The threat of protectionism around the world raises alarm in Latin America. If rhetoric becomes reality, it would
likely be a blow to agricultural exporters throughout the region, as these are the sectors in the US and Europe
that compete most with Latin American imports. A crackdown on immigration to the US will hurt remittances, a
key economic driver and source of fiscal revenue in several countries. Given its strong cross-border ties Mexico
is sure to be the most affected, though the consequences could be more pronounced in smaller Central
American nations such as Guatemala that are proportionally much more dependent on remittances. Finally, a
renegotiation of the North American Free Trade Agreement (NAFTA) is another potential blow to Mexico, though it
is far from certain what a renegotiated agreement would look like or if it will happen at all. While Mexican
manufacturers would probably be hurt by rising tariffs, some sectors could benefit – for example if an updated
NAFTA allowed Mexico to expedite much needed reforms in the energy and telecommunications sectors, which
would bring down costs for consumers.
In other ways, Latin American countries are more in control of their destiny than ever before. Stronger and more
diversified economies throughout the region are better equipped today to weather external shocks than in the
past. Meanwhile, favorable demographics and a growing middle class continue to drive investment and strong
consumer confidence. Democratic institutions - though they are being severely tested in Venezuela - are
generally growing more emboldened. For all the concern about global political winds, these will remain very
powerful arguments for private sector decision makers moving forward, and they give plenty of reason for
optimism.
JLL Research
January, 2017
Office Market Overview| Latin America | EY 2016
0 50 100 150 200 250
Brazil
São Paulo
Rio de Janeiro
Mexico
Mexico City
Monterrey
Guadalajara
Colombia
Bogota
Medellin
Cali
Barranquilla
Argentina
Buenos Aires
Peru
Lima
Venezuela
Caracas
Chile
Santiago
Ecuador
Quito
Guayaquil
Guatemala
Guatemala City
Costa Rica
San José
Puerto Rico
San Juan
Panama
Panama City
Uruguay
Montevideo
5 Office Market Overview| Latin America | EY 2016
Population by Country and Major Markets, 2016
• Several Latin American countries have one large city
that accounts for a significant share of the national
population. These include Uruguay, Argentina, Peru,
and Chile as well as all Central American and
Caribbean nations.
• Brazil, Mexico, and Colombia are the three countries
with the most widely distributed populations. Each
contains several cities with over one million
inhabitants.
Source: Oxford Economics (2017)
Country Population (millions)
Major Market Population (millions)
$0
$5.000
$10.000
$15.000
$20.000
$25.000
$30.000
$0
$500.000
$1.000.000
$1.500.000
$2.000.000
$2.500.000
$3.000.000
$3.500.000
Bra
zil
Sao
Pau
lo
Rio
de
Jan
eiro
Mex
ico
Mex
ico
Cit
y
Mo
nte
rrey
Gu
adal
ajar
a
Arg
enti
na
Bu
eno
s A
ires
Co
lom
bia
Bo
gota
Med
ellin Cal
i
Bar
ran
qu
illa
Ven
ezu
ela
Car
acas
Ch
ile
San
tiag
o
Pe
ru
Lim
a
Ecu
ado
r
Qu
ito
Gu
ayaq
uil
Gu
ate
mal
a
Gu
ate
mal
a C
ity
Pan
ama
Pan
ama
Cit
y
Co
sta
Ric
a
San
Jo
se
Uru
guay
Mo
nte
vid
eo
Pu
erto
Ric
o
San
Ju
an
GD
P P
er C
ap
ita
(U
SD
)
GD
P (
Billio
ns
of U
SD
)
6 Office Market Overview| Latin America | EY 2016
GDP by Country and Major Markets, 2016
• Brazil and Mexico by far have the largest economies in
Latin America. However the countries with the highest
GDP per capita are Puerto Rico, Uruguay, Chile,
Panamá and Argentina.
• Currency volatility over the past two years has
distorted the size of economies in terms of USD, most
notably Colombia, Chile, Peru, Venezuela, Argentina,
and Brazil.
• Most countries in Latin America saw stagnant growth
in 2016, with a few – Venezuela, Brazil, and Argentina –
going through recessions.
Source: Oxford Economics (2017)
The World bank (2017)
Major Market GDP (USD – PPP)
Country GDP (Billions of USD – PPP)
Country GDP Per Capita (USD – PPP)
7
Total Stock (m²), EY 2016
Office Market Overview| Latin America | EY 2016
• The two largest markets in Latin America are Mexico
City, with over 6 million m2
of area, and São Paulo, with
nearly 4.8 million m2. These two cities account for over
one third of the entire office stock of Latin America.
• Latin American office markets are very young, and
have grown significantly over the past 5 years and will
continue to do so. As a reference, only 6 cities in this
region – Mexico City, São Paulo, Santiago, Bogotá, Rio
de Janeiro, and Lima – would rank in the top 40 of US
cities in terms of office stock.
• Adjustments have been made to market size in Quito
and Guayaquil from the 2015 report, relating to an
adjustment in building classifications.
Col. Caribbean
Cali
Montevideo
Guadalajara
Guayaquil
Guatemala City
Quito
Medellín
San Juan
San José
Monterrey
Caracas
Buenos Aires
Panama City
Lima
Rio de Janeiro
Bogotá
Santiago
São Paulo
Mexico City
Rentable Area (m2)Source: JLL Research (2017)
8
Vacancy Rates, EY 2016
Office Market Overview| Latin America | EY 2016
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Buenos Aires
Cali
Guatemala City
Caracas
Guayaquil
Santiago
Montevideo
Medellín
Quito
Bogotá
Mexico City
San José
Monterrey
Guadalajara
Lima
San Juan
São Paulo
Rio de Janeiro
Col. Caribbean
Panama City
Vacancy Rate (%)Source: JLL Research (2017)
• Panamá City and Barranquilla are the two markets with
the highest vacancy rates in the region. Both of these
cities have seen considerable real estate speculation
by investors looking to take advantage of increased
economic activity brought about by the expansion of
the Panamá Canal and Colombia´s proliferation of free
trade agreements.
• Buenos Aires has the lowest vacancy rate at 5% after
several years of relatively little new supply.
• JLL considers 8-12% vacancy to be within the “market
equilibrium” range, meaning neither the tenant nor the
landlord has considerable leverage in negotiations.
Currently 13 of the 20 cities tracked in this report show
vacancy that is above the equilibrium range,
suggesting that they are tenant favorable markets.
Market equilibrium
vacancy rate: 8-12%
9
Change in Vacancy (m2), Y-o-Y
Office Market Overview| Latin America | EY 2016
Santiago
Buenos Aires
Panama City
Cali
San José
Monterrey
Guatemala City
Guayaquil
Montevideo
San Juan
Guadalajara
Col. Caribbean
Medellín
Caracas
Bogotá
Quito
Mexico City
São Paulo
Lima
Rio de Janeiro
-50.000 - 50.000 100.000 150.000 200.000 250.000
Rentable Area (m2)Source: JLL Research (2017)
• Rio de Janeiro and São Paulo have seen vacant area
surge as production has been very high and demand
has been stagnant amidst Brazil´s recession.
• Lima has seen a construction boom in recent years.
While demand has been significant there, new supply
has been high enough to add over 150,000 m2
of
vacant area in the past year.
• Santiago and Buenos Aires saw vacant area fall in the
past year, as demand outpaced new supply.
• With a surge in vacant area, many markets that
traditionally have been very tight – such as Bogotá,
Lima, Medellín, and Quito – are moving to a more
tenant-favorable dynamic.
10
Production (m2), Y-o-Y
Office Market Overview| Latin America | EY 2016
- 50.000 100.000 150.000 200.000 250.000 300.000 350.000 400.000 450.000 500.000
San Juan
Montevideo
Cali
Guatemala City
Caracas
Guayaquil
Col. Caribbean
San José
Monterrey
Buenos Aires
Guadalajara
Medellín
Santiago
Quito
Panama City
São Paulo
Rio de Janeiro
Bogotá
Lima
Mexico City
Rentable Area (m2)Source: JLL Research (2017)
• Mexico City saw the addition of nearly 450,000 m2
of
area in the past year.
• Lima, with 330,000 m2 of new production in 2016, saw
its market grow by almost 20% in one year.
• San Juan has not had any new supply for nearly 10
years, as Puerto Rico continues to deal with a crippling
recession.
• Lima, Bogotá, Rio de Janeiro, São Paulo, and Panamá
City are at or approaching the peak of a construction
boom.
11
Net Absorption (m2), Y-O-Y
Office Market Overview| Latin America | EY 2016
-50.000 - 50.000 100.000 150.000 200.000 250.000 300.000 350.000
San Juan
São Paulo
Rio de Janeiro
Montevideo
Guatemala City
Col. Caribbean
Cali
Guadalajara
Guayaquil
Caracas
Monterrey
Medellín
San José
Quito
Buenos Aires
Panama City
Santiago
Lima
Bogotá
Mexico City
Rentable Area (m2)Source: JLL Research (2017)
• The top 5 cities in net absorption in 2016 were all
capitals of Pacific Alliance countries – Mexico City
(295,000 m2), Bogotá (200,000 m
2), Lima (190,000
m2), Santiago (138,000 m
2), and Panamá City
(132,000 m2). This suggests strong economic
fundamentals in these countries at the moment.
• San Juan and São Paulo were the only two cities that
saw a negative net absorption this past, reflecting the
difficult economic situation facing Puerto Rico and
Brazil recently.
12
Production Pipeline (2017-2019) vs. Current Stock (m2)
Office Market Overview| Latin America | EY 2016
0%
6%
15%
13%
38%
24%
23%
22%
17%
16%
18%
24%
33%
12%
23%
160%
11%
24%
35%
23%
- 1.000.000 2.000.000 3.000.000 4.000.000 5.000.000 6.000.000 7.000.000
San Juan
Cali
Montevideo
Guatemala City
Col. Caribbean
Guayaquil
Quito
Medellín
San José
Caracas
Panama City
Buenos Aires
Monterrey
Santiago
Lima
Guadalajara
São Paulo
Rio de Janeiro
Bogotá
Mexico City
Rentable Area (m2)
Current Stock
Production, 2017-2019
* Data label indicates percentage
growth of stock by 2019
Source: JLL Research (2017)
• Mexico City continues to dominate the production
pipeline in Latin America, with over 1.4 million m2 to be
delivered by 2019. This includes an astonishing
800,000 m2
for 2017.
• Other markets that will see significant growth in stock
over the next 3 years are Bogotá, Rio de Janeiro, São
Paulo, Guadalajara, and Lima.
• The markets that will grow the most relative to their
current size over the next 3 years are Guadalajara
(which will more than double by 2019), Bogotá,
Monterrey, and Barranquilla.
13
Average Asking Rents, EY 2016
Office Market Overview| Latin America | EY 2016
$- $5 $10 $15 $20 $25 $30 $35 $40
Guatemala City
Guayaquil
Col. Caribbean
Guadalajara
Medellín
San Juan
Monterrey
San José
Lima
Quito
Cali
Bogotá
Panama City
Santiago
Mexico City
Montevideo
São Paulo
Caracas
Buenos Aires
Rio de Janeiro
Average Asking Rent (USD/m2/month)
Average RentClass AAverage RentClass AB
Source: JLL Research (2017)
• The most expensive cities in Latin America to lease
office space (in USD) are Rio de Janeiro, Buenos
Aires, Caracas, and São Paulo. However, these rents
are still low compared to other regions in the world.
• Guatemala City – with Class A buildings available for
as low as $11/m2/month – has seen much interest
from call center companies who are looking to
minimize operational costs.
• Rents in Colombian cities have fallen sharply in USD
over the past two years, reflecting a deterioration in the
exchange rate. Rents in local currency have increased
Y-o-Y.
14 Office Market Overview| Latin America | EY 2016
Change in Rents, Y-o-Y
Caracas
Lima
Montevideo
Guayaquil
Bogotá
Monterrey
Guadalajara
Panama City
Col. Caribbean
San Juan
Quito
San José
Guatemala City
Mexico City
Santiago
Medellín
Buenos Aires
Rio de Janeiro
São Paulo
Cali
-30% -20% -10% 0% 10% 20% 30% 40% 50%
Change in Rents (%)
Percent Change:Class A Avg. Rent
Percent Change:Class AB Avg. Rent
Source: JLL Research (2017)
• Rents have continued to fall in most Latin American
cities, prolonging a trend that has been observed since
2015. This is due to high production and
underwhelming demand in much of the region.
• The cities that saw rental increases over the past year
– Mexico City, Santiago, Medellín, Buenos Aires, Rio
de Janeiro, São Paulo, and Cali – can attribute this
mainly to a recovery in the exchange rate since early
2016 / late 2015.
• In Lima a supply glut has led landlords to offer the
lowest rents that the market has seen since 2009.
0% 2% 4% 6% 8% 10% 12%
San Juan
Quito
Montevideo
Guayaquil
Guatemala City
Col. Caribbean
Cali
Buenos Aires
Santiago
Caracas
Guadalajara
Monterrey
Mexico City
San José
Bogotá
Panama City
Lima
Medellín
São Paulo
Rio de Janeiro
15
Average Cap Rate, EY 2016
Office Market Overview| Latin America | EY 2016
N/A
N/A
N/A
N/A
N/A
• Cap rates in Latin America are generally between 7-
11%. This is higher than cap rates in the US or
Europe, reflecting added risk premiums in many of
these markets.
• Brazil is showing the highest average cap rates at the
moment, reflecting additional risk at the moment.
• Several cities are listed as “N/A”, as there is too small
a sample of asset purchases to determine a reliable
average cap rate.
Source: JLL Research (2017)
N/A
N/A
16
Regional Production and Absorption, 2012-2016
• Latin America saw a fall both in production and net
absorption over 2015 levels, with over 2.4 million m2
of
office delivered, and over 1.4 million m2
of demand.
This has pushed the regional vacancy rate up to 17%.
• Assuming planned projects remain on schedule, JLL
anticipates that over 6 million m2
will be completed
between 2017-2019.
• Office production will peak in 2017, aided most by
Mexico City (800,000 m2), São Paulo (392,000 m
2),
Bogotá (340,000 m2), Rio de Janeiro (306,000 m
2), and
Guadajalara (214,000 m2).
• With many cities at or near their peak supply cycle, low
rents and high vacancy are driving an adjustment in
most cities that will see new supply taper, as fewer
investors will consider potential projects to be profitable
in such a challenging market context.
Source: JLL Research (2017)
Office Market Overview| Latin America | EY 2016
0%
5%
10%
15%
20%
25%
30%
-
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
4.000.000
2012 2013 2014 2015 2016 2017 2018 2019V
ac
an
cy
Rate
Ren
tab
le A
rea
(m2)
Production
Net Absorption
Vacancy Rate
Production Forecast
Argentina – Buenos Aires
17
Macroeconomic overview
• In the first three quarters of 2016, Argentina’s GDP fell
2.4% compared with the same period of 2015. The most
affected sectors of the economy in this period were
manufacturing and construction.
• The construction industry was compromised by the
contraction of public works. The Construction Indicator
(ISAC) decreased 13.1% in the first eleven months of
2016, compared with the same period of 2015.
• Inflation in 2016 in CABA reached 34.9% according to
official statistics. Inflation in CABA for the second half of
the year was 8.8% showing signals of a slowing pace.
Private estimations showed an inflation of 40% for 2016.
• The Argentinian peso devalued a 19.5% during the year,
with the exchange rate oscillating between ARS 13.50 /
16.2 per dollar. The local currency managed to stabilize
within this range after the strong adjustment suffered in
late 2015.
Market trends
• Production in 2016 reached 67,000 m2, taking the overall
office stock to 1.4 million m2. Existing class A buildings
represent 45% of the market, whereas class AB spaces
correspond to the remaining 55%.
• Net absorption in 2016 was 92,000 m2, the highest mark
since 2010. Particularly strong movement was noted in
the Catalinas submarkets.
• Vacancy was around 5% for the year, while rents fell by
approximately 2,5% Y-o-Y, on average.
• Over 130,000 m2
are scheduled for completion in 2017,
following a growing trend in new supply as investor
confidence is high.
Office market statistics
Total stock (m²) 1,400,000
Overall vacancy rate 5.00%
Production - 2016 (m²) 67,000
Net absorption – 2016 (m²) 92,000
Expected production – 2017 (m²) 136,000
Expected net absorption – 2017 (m²) 109,000
Class A rental range (USD/m²/mo.) 25-36
Class AB/B+ rental range (USD/m²/mo.) 20-26
Average purchase price range (USD/m²) $4,000 – 4,800
Historic production, absorption, and vacancy
Office Market Overview| Latin America | EY 2016
0%
5%
10%
15%
20%
25%
30%
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
160.000
180.000
200.000
Va
ca
nc
y R
ate
(%
)
Re
nta
ble
Are
a (m
2)
Production
Absorption
Vacancy
Brazil – São Paulo
18
Macroeconomic overview
• Brazil is undergoing one of its worst recessions on
record, with GDP contracting over 3.6% Y-o-Y.
• Inflation has fallen to 6.3% Y-o-Y, down from over 10.7% a
year earlier. This has generated optimism, and has
encouraged the Central Bank to cut interest rates by 50
basis points as of December 2016.
• After the impeachment of Dilma Rouseff, vice president
Michel Temer has been sworn in amidst popular unrest,
vowing to get the country back on track. Meanwhile the
‘car-wash’ corruption scandal that began with Petrobras
has now implicated construction giant Odebrecht. The
US department of justice indicted the company with
paying millions of dollars in bribes to win bids on a variety
of projects, including highways in Peru, a port in Cuba,
the Caracas metro, and World Cup infrastructure in Brazil,
among many others.
Market trends
• Vacancy in São Paulo reached 25% in 2016 and is
expected to rise to 28-30% in 2016, a historic mark for the
metropolis, driven by the low level of demand and the
pace at which projects are being delivered.
• Net office absorption fell by 10,000 m2 for the year, a
sharp turn from 2015 when the city saw 200.000 m2 in
absorption. This is due to companies aggressively
downsizing, leading to a glut of vacant space.
• Class A rents have risen 24% from 2015, while AB rents
soared 40% in 2016. This increase is mainly due to the
recovery in the exchange rate after a sharp fall in 2015.
• About 500,000 m2 are expected to be added to the
market from 2017-2019, which will keep vacancy high
and rents low. However new production is expected to
slow down as projects are cancelled in a very challenging
economic context. Low demand is not expected to
recover until 2018.
Office market statistics
Total stock (m²) 4,765,000
Overall vacancy rate 25.2%
Production - 2016 (m²) 206,000
Net absorption – 2016 (m²) -10,000
Expected production – 2017 (m²) 392,000
Expected net absorption – 2017 (m²) 50,000
Class A rental range (USD/m²/mo.) 17-39
Class AB/B+ rental range (USD/m²/mo.) 15-33
Average purchase price range (USD/m²) $1,890 – 4,900
Historic production, absorption, and vacancy
Office Market Overview| Latin America | EY 2016
0%
5%
10%
15%
20%
25%
30%
35%
40%
-50.000
-
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
450.000
500.000
Vac
ancy
Rat
e
Re
nta
ble
Are
a (m
2)
Production
Absorption
Vacancy
Brazil – Rio de Janeiro
19
Macroeconomic overview
• Brazil is undergoing one of its worst recessions on
record, with GDP contracting over 3.6% Y-o-Y.
• Inflation has fallen to 6.3% Y-o-Y, down from over 10.7% a
year earlier. This has generated optimism, and has
encouraged the Central Bank to cut interest rates by 50
basis points as of December 2016.
• After the impeachment of Dilma Rouseff, vice president
Michel Temer has been sworn in amidst popular unrest,
vowing to get the country back on track. Meanwhile the
‘car-wash’ corruption scandal that began with Petrobras
has now implicated construction giant Odebrecht. The
US department of justice indicted the company with
paying millions of dollars in bribes to win bids on a variety
of projects, including highways in Peru, a port in Cuba,
the Caracas metro, and World Cup infrastructure in Brazil,
among many others.
Market trends
• Overall vacancy in Rio de Janeiro continues its upward
trend, approaching a record level of 31%. This is driven
by high production and low demand. Net absorption in
Rio was very low for the third straight year, as several
companies are downsizing and returning space as a
result of the adverse economic environment.
• Rents increased by 17% on average Y-o-Y for Class A
assets, while class AB buildings saw the rents go up 23%.
This increase is mainly due to the recovery in the
exchange rate after a sharp fall in 2015.
• The market dynamic is not likely to change in 2017,
although there is a chance of a currency devaluation. The
market will likely recover in 2018 when the economy
improves and tenants have more incentives to occupy
new corporate spaces.
Office market statistics
Total stock (m²) 2,200,000
Overall vacancy rate 31%
Production - 2016 (m²) 228,000
Net absorption – 2016 (m²) 5,000
Expected production – 2017 (m²) 178,000
Expected net absorption – 2017 (m²) -50,000
Class A rental range (USD/m²/mo.) 25-63
Class AB/B+ rental range (USD/m²/mo.) 23-39
Average purchase price range (USD/m²) $2,900 – 7,900
Historic production, absorption, and vacancy
Office Market Overview| Latin America | EY 2016
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
50.000
100.000
150.000
200.000
250.000
Vac
ancy
Rat
e
Re
nta
ble
Are
a (m
2)
Production
Absorption
Vacancy
Chile - Santiago
20
Macroeconomic overview
• During the final quarter of 2016 the Chilean economy
experienced its first annual contraction since 2009
despite an improvement in copper prices.
• Following the release of weaker-than-expected economic
data, the Central Bank has opted to cut rates by 25 basis
points in order to provide further stimulus to the economy
and at the same time provide support for the exchange
rate to the US dollar. The economy should improve in
2017, buoyed by these policies as well as improving
external conditions.
• As low prices for copper and other commodities have
hurt government revenue, the current administration´s
must now commit to reducing the fiscal deficit.
• Consumer prices decelerated further during last year to
2.7%, which is the lowest value since 2013. Nonetheless,
as the economy is expected to pick up steam in 2017,
reducing spare capacity and pushing up prices.
Market trends
• Total production for the year was approximately 110,000
m2, consistent with most previous years with the
exception of 2014.
• Demand was strong in 2016, reaching 138,000 m2,
although below 2015 levels. The vacancy rate has been
falling over the last three quarters and finished the year at
8.7%. Delays in key projects have kept the market
relatively tight.
• Falling vacancy is giving landlords more leverage.
Average asking rents in the Class A segment, expressed
in Unidades de Fomento (UF) exhibited a decrease of 5%
throughout the year, reaching UF 0.57/m2/month. (US$
22.5/m2/month). A decrease of 4.2% in average asking
rents of Class AB was observed reaching UF
0.45/m2/month (US$ 17.7 /m
2/month). Multinational
tenants will find Santiago more attractive as long as the
peso remains weak against the US dollar.
Office market statistics
Total stock (m²) 3,216,000
Overall vacancy rate 8.7%
Production - 2016 (m²) 110,000
Net absorption – 2016 (m²) 138,000
Expected production – 2017 (m²) 166,000
Expected net absorption – 2017 (m²) 110,000
Class A rental range (USD/m²/mo.) 18-29
Class AB/B+ rental range (USD/m²/mo.) 11-25
Average purchase price range (USD/m²) $3,300 – 4,400
Historic production, absorption, and vacancy
Office Market Overview| Latin America | EY 2016
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
-
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
2008 2009 2010 2011 2012 2013 2014 2015 2016
Vac
ancy
Rat
e
Re
nta
ble
Are
a (m
2)
Production
Absorption
Vacancy
Colombia - Bogotá
21
Macroeconomic overview
• The fall in hydrocarbons and mining revenue, followed by the
subsequent depreciation of the exchange rate and a chronic
fiscal and trade deficit, have obligated the government to
devise a comprehensive tax reform in order to address these
ailments.
• President Santos suffered a stunning defeat in a referendum on
the peace deal signed with the FARC guerilla movement to end
Latin America´s longest running armed conflict. This prompted
his administration to make concessions to the leaders of the
“no” movement, and pass the resulting deal through Congress.
The agreement goes into effect in 2017, though without popular
approval.
• The 4G infrastructure program continues to move ahead,
improving first and second-generation highways as well as
airports, railways, and ports. The program aims to substantially
improve Colombia’s competitiveness, however recent fiscal
woes will likely postpone many of the projects.
Market trends
• The Bogotá market saw its second highest production year on
record, with 249,000 m2
delivered to the market. This should
continue 2018 and 2019, however it is forecasted to return to
normal levels afterwards.
• Demand was strong in 2016, driven by many companies
upgrading, expanding, or consolidating. Tenants are taking
advantage of favorable rents to shift to newer buildings with
more efficient ownership structures. These factors, along with
notable public sector consolidations, drove strong net
absorption of 199,000 m2.
• Class A rents have begun to fall in local currency due to high
prevalence of Class A projects in lower-priced submarkets like
Salitre and Eldorado, while Class AB rents have kept steady
during 2016. This has led to a closing gap between average
rents in the two asset classes. When stated in USD, rents have
stabilized along with the COP/USD exchange rate.
Office market statistics
Total stock (m²) 2,300,000
Overall vacancy rate 12.47%
Production - 2016 (m²) 247,000
Net absorption – 2016 (m²) 199,000
Expected production – 2017 (m²) 339,000
Expected net absorption – 2017 (m²) 230,000
Class A rental range (USD/m²/mo.) 17 – 28
Class AB/B+ rental range (USD/m²/mo.) 13 - 21
Average purchase price range (USD/m²) $2,000 – 3,600
Historic production, absorption, and vacancy
Office Market Overview| Latin America | EY 2016
0%
5%
10%
15%
20%
25%
30%
-
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Vac
ancy
Rat
e
Re
nta
ble
Are
a(m
2 )
Production (m2)
Net Absorption (m2)
Vacancy
Forecast
* Assuming exchange rate of COP 3000 / 1 USD
Colombia - Medellín
22
Macroeconomic overview
• The fall in hydrocarbons and mining revenue, followed by
the subsequent depreciation of the exchange rate and a
chronic fiscal and trade deficit, have obligated the
government to devise a comprehensive tax reform in
order to address these ailments.
• President Santos suffered a stunning defeat in a
referendum on the peace deal signed with the FARC
guerilla movement to end Latin America´s longest
running armed conflict. This prompted his administration
to make concessions to the leaders of the “no”
movement, and pass the resulting deal through
Congress. The agreement goes into effect in 2017,
though without popular approval.
• The 4G infrastructure program continues to move ahead,
improving first and second-generation highways as well
as airports, railways, and ports. The program aims to
substantially improve Colombia’s competitiveness,
however recent fiscal woes will likely postpone many of
the projects.
Market trends
• Medellín saw its highest production and absorption on
record in 2016, as years of pent up demand prompted a
significant supply response.
• Production peaked in 2016 with the delivery of several
Class A buildings in the El Poblado submarket. In the
coming years the pipeline will slow down a bit and
vacancy should fall back down to between 5-8%.
• Medellín is a highly segmented market. Tenants typically
either occupy small areas of less than 250 m2, or – in the
case of large domestic companies - over 2,000 m2.
However the intermediate market is beginning to appear
as the city and market evolve. Institutional funds are
beginning to eye Medellín, looking to capitalize on the
growing intermediate demand. New projects are
increasingly owned by these funds rather than being pre-
sold.
Office market statistics
Total stock (m²) 718,000
Overall vacancy rate 11%
Production - 2016 (m²) 97,000
Net absorption – 2016 (m²) 67,000
Expected production – 2017 (m²) 44,000
Expected net absorption – 2017 (m²) 56,000
Class A rental range (USD/m²/mo.) 12 - 19
Class AB/B+ rental range (USD/m²/mo.) 9 - 16
Average purchase price range (USD/m²) $1,500 – 2,800
Historic production, absorption, and vacancy
Office Market Overview| Latin America | EY 2016
Historic production, absorption, and vacancy
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
-
20.000
40.000
60.000
80.000
100.000
120.000
140.000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Vac
ancy
Rat
e
Re
nta
ble
Are
a (m
2)
Production
Absorption
Vacancy Forecast
* Assuming exchange rate of COP 3000 / 1 USD
Colombia - Cali
23
Office market statistics
Total stock (m²) 226,000
Overall vacancy rate 5.3%
Production - 2016 (m²) 16,000
Net absorption – 2016 (m²) 22,000
Expected production – 2017 (m²) 0
Expected net absorption – 2017 (m²) 7,000
Class A rental range (USD/m²/mo.) 20-22
Class AB/B+ rental range (USD/m²/mo.) 7-18
Average purchase price range (USD/m²) $1,800 – 2,500
Historic production, absorption, and vacancy
Office Market Overview| Latin America | EY 2016
Macroeconomic overview
• The fall in hydrocarbons and mining revenue, followed by
the subsequent depreciation of the exchange rate and a
chronic fiscal and trade deficit, have obligated the
government to devise a comprehensive tax reform in
order to address these ailments.
• President Santos suffered a stunning defeat in a
referendum on the peace deal signed with the FARC
guerilla movement to end Latin America´s longest
running armed conflict. This prompted his administration
to make concessions to the leaders of the “no”
movement, and pass the resulting deal through
Congress. The agreement goes into effect in 2017,
though without popular approval.
• The 4G infrastructure program continues to move ahead,
improving first and second-generation highways as well
as airports, railways, and ports. The program aims to
substantially improve Colombia’s competitiveness,
however recent fiscal woes will likely postpone many of
the projects.
Market trends
• Building area permits fell by nearly 75% from 2015 levels,
indicating a fall in investor confidence and a bearish real
estate market.
• Cali saw the delivery of two Class A buildings in 2016 that
added 16,000 m2 to the market. Demand was very
responsive to this, registering 22,000 m2 of net
absorption.
• Production will slow to a crawl in the coming years, as the
only project under construction at the moment is
Zonamerica, a replica of the successful Free Trade Zone
in Montevideo, Uruguay.
• JLL expects the market to tighten significantly, as few
options for expansion will drive rents up. By the end of
2017, Cali could see vacancy fall as low as 3%.
-5%
5%
15%
25%
35%
45%
(5.000)
5.000
15.000
25.000
35.000
45.000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Vac
ancy
Rat
e
Ren
tab
le A
rea
(m2 )
Production (m2)
Absorption (m2)
Vacancy (%) Forecast
* Assuming exchange rate of COP 3000 / 1 USD
Colombia – Barranquilla (and Caribbean)
24
Office market statistics
Total stock (m²) 220,000
Overall vacancy rate 32%
Production - 2016 (m²) 45,000
Net absorption – 2016 (m²) 22,000
Expected production – 2017 (m²) 32,000
Expected net absorption – 2017 (m²) 27,000
Class A rental range (USD/m²/mo.) 12 - 22
Class AB/B+ rental range (USD/m²/mo.) 10 - 17
Average purchase price range (USD/m²) $1,160 – 2,060
Office Market Overview| Latin America | EY 2016
Macroeconomic overview
• The fall in hydrocarbons and mining revenue, followed by the
subsequent depreciation of the exchange rate and a chronic
fiscal and trade deficit, have obligated the government to
devise a comprehensive tax reform in order to address these
ailments.
• President Santos suffered a stunning defeat in a referendum on
the peace deal signed with the FARC guerilla movement to end
Latin America´s longest running armed conflict. This prompted
his administration to make concessions to the leaders of the
“no” movement, and pass the resulting deal through Congress.
The agreement goes into effect in 2017, though without popular
approval.
• The 4G infrastructure program continues to move ahead,
improving first and second-generation highways as well as
airports, railways, and ports. The program aims to substantially
improve Colombia’s competitiveness, however recent fiscal
woes will likely postpone many of the projects.
Market trends
• The relatively new market of Colombia´s Caribbean region –
which includes the cities of Barranquilla, Cartagena, and Santa
Marta – has grown significantly over the past few years.
Investment activity has exploded due to the signing of several
free trade agreements and the expansion of the Panamá Canal
– all of which, it is thought, will benefit this cluster of port cities.
• Thus far demand has failed to live up to expectations. Nearly
90,000 m2
of new supply have been completed in the past two
years, but with only 30,000 m2
of net absorption.
• The vacancy rate has skyrocketed to over 30% - the second
highest in the region. This has not yet affected rents, as Class
A landlords hold out for demand.
• The supply cycle appears to have hit its peak in 2016, as
production will diminish in the next few years.
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Vac
ancy
Rat
e
Re
nta
ble
Are
a (m
2 )
Production
Absorption
Vacancy Rate
Historic production, absorption, and vacancy
Forecast
* Assuming exchange rate of COP 3000 / 1 USD
Costa Rica - San José
25
Macroeconomic overview
• Costa Rica saw a robust recovery in 2016, thanks to strong
exports and lower oil prices. These factors boosted terms of
trade and freed up disposable income for households.
• The implementation of a Virtual Tax Administration program
has cut down drastically on tax evasion, helping the
government to reduce its budget gap in 2016. This will
reduce debt payments and pressure on interest rates.
• There is some concern in Costa Rica about the potential for
renegotiation of the Central American Free Trade Agreement
CAFTA) with the United States. If this becomes a reality, it
could hurt the Costa Rican manufacturing sector, a pillar of
the national economy.
• Inflation for the year was 0%, far below the Central Bank´s
target rate. Interest rates will be frozen for the year to
stimulate inflation.
Market trends
• San José is an important hub for manufacturing and
business process outsourcing (BPO). Accordingly, 42% of
the office market is concentrated in Free Trade Zones and
72% is contained in enclosed business and/or industrial
parks.
• 62,000 m2
of office space were delivered in 2016, a slight
decrease from 2015. Production should be higher in 2017,
with 80,000 m2
of area expected to be completed.
• San José was one of only a handful of cities to see demand
outpace supply this year, with 68,000 m2
of net absorption.
• Vacancy has fallen moderately over the past year. JLL
expects that vacancy will continue its gradually fall over the
medium term as the local economy is recovering;
furthermore we believe Costa Rica is not at significant risk of
losing considerable trade flows with the US despite political
rhetoric.
Office market statistics
Total stock (m²) 1,087,000
Overall vacancy rate 15%
Production - 2016 (m²) 62,000
Net absorption – 2016 (m²) 68,000
Expected production – 2017 (m²) 80,000
Expected net absorption – 2017 (m²) 73,000
Class A rental range (USD/m²/mo.) 15-25
Class AB/B+ rental range (USD/m²/mo.) 14-21
Average purchase price range (USD/m²) $1,600 – 2,200
Historic production, absorption, and vacancy
Office Market Overview| Latin America | EY 2016
0%
5%
10%
15%
20%
25%
30%
-
20.000
40.000
60.000
80.000
100.000
120.000
140.000
Va
ca
nc
yR
ate
Ren
tab
le A
rea
(m2)
Production (m2)
Absorption (m2)
Vacancy (%)
Forecast
Ecuador - Quito
26
Macroeconomic overview
• The coastal city of Manta was hit by a magnitude 7.8
earthquake in April. Much of the city was destroyed, leaving
nearly 700 casualties and thousands injured and homeless.
• Ecuador has been one of the countries hardest hit by the fall
in commodities – particularly oil, which accounts for the
majority of export earnings. Its use of the US dollar has
further hurt the economy, as many extractive and
agricultural exports are now comparatively more expensive
than those from competing countries like Colombia and
Peru, whose currencies recently devalued.
• Falling export revenues and generous government spending
in an election year combined to severely strain the
government´s budget. The fiscal deficit reached a worrying
6% of GDP in 2016.
Market trends
• The Quito office market is highly fragmented, with 64% of
the stock characterized as strata title. Another 20% is
occupied by the public sector – one of the highest
proportions in the region.
• Production reached a record of 132,000 m2 in 2016, as
several iconic projects such as Ekopark, Metropolitan, and
Titanium Plaza hit the market at the same time. Demand
also reached a historic peak of 80,000 m2, though this
resulted in a rise in vacancy from 4% a year ago to over 12%
today as supply was still much higher.
• Rents have generally fallen over the past year and should
continue to do so in the short term as landlords become
more competitive.
• The Ecuadorean government has committed to an
ambitious plan of consolidating all government ministries
into campuses known as Government Platforms that will be
rolled out beginning in 2017. While this should greatly
enhance public sector productivity, they risk flooding the
market as several buildings currently occupied by ministries
will be vacated.
Office market statistics
Total stock (m²) 582,000
Overall vacancy rate 12.4%
Production - 2016 (m²) 132,000
Net absorption – 2016 (m²) 80,000
Expected production – 2017 (m²) 53,000
Expected net absorption – 2017 (m²) 30,000
Class A rental range (USD/m²/mo.) 15-20
Class AB/B+ rental range (USD/m²/mo.) 11-17
Average purchase price range (USD/m²) $1,500 – 2,100
Historic production, absorption, and vacancy
Office Market Overview| Latin America | EY 2016
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
-
20.000
40.000
60.000
80.000
100.000
120.000
140.000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Vac
ancy
Rat
e
Ren
tab
le A
rea
(m2
)
Production
Absorption
Vacancy
Forecast
* Ecuador data has changed since 2015 due to a
reclassification of the market
Ecuador - Guayaquil
27
Macroeconomic overview
• The coastal city of Manta was hit by a magnitude 7.8
earthquake in April. Much of the city was destroyed,
leaving nearly 700 casualties and thousands injured and
homeless.
• Ecuador has been one of the countries hardest hit by the
fall in commodities – particularly oil, which accounts for
the majority of export earnings. Its use of the US dollar
has further hurt the economy, as many extractive and
agricultural exports are comparatively more expensive
than those from competing countries like Colombia and
Peru, whose currencies devalued recently.
• Falling export revenues and generous government
spending in an election year combined to severely strain
the government´s budget. The fiscal deficit reached a
worrying 6% of GDP in 2016.
Market trends
• Production was up slightly Y-o-Y over 2015 levels, with
38,000 m2 delivered to the market. Approximately 85,000
m2
are expected to be completed by 2019.
• Demand was 28,000 m2, representing a 30% fall from
2015.
• Vacancy has risen slightly over the past year, from 6.4%
in 2015 to 7% today. This is mostly due to new projects
that have large areas vacant still.
• Rents fell by nearly 5% Y-o-Y, reflecting a slowdown in
demand.
Office market statistics
Total stock (m²) 376,000
Overall vacancy rate 7%
Production - 2016 (m²) 38,000
Net absorption – 2016 (m²) 28,000
Expected production – 2017 (m²) 30,000
Expected net absorption – 2017 (m²) 32,000
Class A rental range (USD/m²/mo.) 13-18
Class AB/B+ rental range (USD/m²/mo.) 7-14
Average purchase price range (USD/m²) $1,100 – 2,000
Stock Distribution and Submarkets
Office Market Overview| Latin America | EY 2016
La Puntilla
4%
Urdesa10%
Centro38%
Kennedy48%
* Ecuador data has changed since 2015 due to a
reclassification of the market
Guatemala – Guatemala City
28
Macroeconomic overview
• The Guatemalan economy has seen steady growth for
the past few years, albeit at a slowing pace. In 2016 the
economy grew by 3.4%, and it is expected to stay around
3-5% in the medium term.
• Guatemala is likely to be one of the countries most at risk
by protectionism and immigration reforms in the United
States. Remittances, which will be severely cut if
immigration becomes more difficult, are responsible for
10% of GDP. Meanwhile Guatemala is part of the Central
American Free Trade Agreement (CAFTA) and could see
different economic activities scaled back if the United
States begins to raise tariffs on Guatemalan products.
• The massive 2015 corruption scandal that resulted in the
imprisonment of former president Otto Perez Molina
ushered into power Jimmy Moreno, a comedian with no
prior political experience. His election illustrates a
widespread popular distrust of the political class at the
moment.
Market trends
• The largest project to be delivered in 2016 was Avia, a
Class A building in the Reforma submarket. Also
completed was a new headquarters for Banrural.
• Guatemala City has the lowest rents of any market in the
western hemisphere due to low demand and the
presence of BPO and call center operators, who establish
sites in Guatemala City precisely to capitalize on low
costs.
• Class A buildings rent for between $9-11/m2/month while
Class AB buildings lease for as low as $6-9/m2/month.
• The ongoing economic recovery in the United States has
had positive spillover effects to the Guatemala market,
contributing to the 12,000 m2 of absorption seen this year.
Office market statistics
Total stock (m²) 528,000
Overall vacancy rate 6.5%
Production - 2016 (m²) 16,000
Net absorption – 2016 (m²) 18,000
Expected production – 2017 (m²) 31,000
Expected net absorption – 2017 (m²) 15,000
Class A rental range (USD/m²/mo.) 9-11
Class AB/B+ rental range (USD/m²/mo.) 6-9
Average purchase price range (USD/m²) $1,000 – 1,750
Stock Distribution and Submarkets
Office Market Overview| Latin America | EY 2016
Americas24%
Proceres43%
Reforma25%
Others8%
Mexico – Mexico City
29
Macroeconomic overview
• The Mexican economy grew 2.3% in real terms during
2016, a slowdown from previous years, though still well
above the Latin American average.
• The economic outlook has deteriorated as the IMF
forecasts 1.7% growth for 2017. The election of Donald
Trump and his proposed protectionist policies could hurt
Mexico by restricting the inflows of investment and
commerce. Potential border taxes and the NAFTA
renegotiation are two topics that will be closely watched.
• The current restrictive US monetary policy has generated
an interest rate hike in Mexico, as well as a slowdown on
the outflow of capital from the nation. On the other hand,
inflation has risen mainly in response to a sliding peso
during 2016. Inflation is expected to surpass 4%, the
upper level of the target range set by the Bank of Mexico.
• Bond rating agencies have grown pessimistic on
Mexico´s sovereign bond rating in light of a rising debt-
to-GDP ratio and economic uncertainty. While a
downgrade is possible in 2017, Mexico would still remain
investment grade.
Market trends
• Mexico City continues to be Latin America´s largest and
fastest growing office market, with approximately 445,000
m2
of space delivered to the market in 2016. Between
2017 – 2019, over 1,400,000 m2 will be completed –
roughly the size of the entire corporate stock of Buenos
Aires.
• Mexico City saw the highest level of demand for the
region during 2016 with 296,000 m2.
• Vacancy has risen Y-o-Y from 12% in 2015 to 13% in
2016.
• Rents saw a 2% increase in the Class A segment, while
Class AB rents have fallen 10% Y-o-Y.
Office market statistics
Total stock (m²) 6,089,000
Overall vacancy rate 13%
Production - 2016 (m²) 445,000
Net absorption – 2016 (m²) 296,000
Expected production – 2017 (m²) 819,000
Expected net absorption – 2017 (m²) 305,000
Class A rental range (USD/m²/mo.) 22-29
Class AB/B+ rental range (USD/m²/mo.) 17-21
Average purchase price range (USD/m²)$2,500 –
6,600
Historic production, absorption, and vacancy
Office Market Overview| Latin America | EY 2016
0%
10%
20%
30%
40%
50%
60%
-
50.000
100.000
150.000
200.000
250.000
300.000
Vac
ancy
Rat
e
Re
nta
ble
Are
a(m
2 )
Availability
Net Demand
Vacancy Rate
Mexico - Monterrey
30
Macroeconomic overview
• The Mexican economy grew 2.3% in real terms during
2016, a slowdown from previous years, though still well
above the Latin American average.
• The economic outlook has deteriorated as the IMF
forecasts 1.7% growth for 2017. The election of Donald
Trump and his proposed protectionist policies could hurt
Mexico by restricting the inflows of investment and
commerce. Potential border taxes and the NAFTA
renegotiation are two topics that will be closely watched.
• The current restrictive US monetary policy has generated
an interest rate hike in Mexico, as well as a slowdown on
the outflow of capital from the nation. On the other hand,
inflation has risen mainly in response to a sliding peso
during 2016. Inflation is expected to surpass 4%, the
upper level of the target range set by the Bank of Mexico.
• Bond rating agencies have grown pessimistic on
Mexico´s sovereign bond rating in light of a rising debt-
to-GDP ratio and economic uncertainty. While a
downgrade is possible in 2017, Mexico would still remain
investment grade.
Market trends
• Monterrey is perhaps the city most at risk if Donald Trump
delivers on his protectionist rhetoric, due to its booming
manufacturing sector with strong trade ties to the United
States.
• Net absorption fell slightly from 68,000 m2
in 2015 to
64,000 m2
in 2016.
• Vacancy fell from 18% in 2015 to 16% this past year.
However with over 200,000 m2
in the production pipeline,
it is likely that Monterrey will see a hike in vacancy and a
continued fall in rents.
Office market statistics
Total stock (m²) 1,170,000
Overall vacancy rate 16.1%
Production - 2016 (m²) 67,000
Net absorption – 2016 (m²) 64,000
Expected production – 2017 (m²) 200,000
Expected net absorption – 2017 (m²) 60,000
Class A rental range (USD/m²/mo.) 15-22
Class AB/B+ rental range (USD/m²/mo.) 13-20
Average purchase price range (USD/m²)$1,500 –
3,500
Stock, Absorption, and Vacancy by Submarket
Office Market Overview| Latin America | EY 2016
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
-
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
450.000
Country Centro/Obispado
SantaMaria/
SanJeronimo
Valle ValleOriente
Vac
ancy
Rat
e
Re
nta
ble
Are
a(m
2 )
Stock
Net Absorption
Vacancy (%)
Mexico - Guadalajara
31
Macroeconomic overview
• The Mexican economy grew 2.3% in real terms during
2016, a slowdown from previous years, though still well
above the Latin American average.
• The economic outlook has deteriorated as the IMF
forecasts 1.7% growth for 2017. The election of Donald
Trump and his proposed protectionist policies could hurt
Mexico by restricting the inflows of investment and
commerce. Potential border taxes and the NAFTA
renegotiation are two topics that will be closely watched.
• The current restrictive US monetary policy has generated
an interest rate hike in Mexico, as well as a slowdown on
the outflow of capital from the nation. On the other hand,
inflation has risen mainly in response to a sliding peso
during 2016. Inflation is expected to surpass 4%, the
upper level of the target range set by the Bank of Mexico.
• Bond rating agencies have grown pessimistic on
Mexico´s sovereign bond rating in light of a rising debt-
to-GDP ratio and economic uncertainty. While a
downgrade is possible in 2017, Mexico would still remain
investment grade.
Market trends
• Net absorption was 22,000 m2
during last year, nearly
doubling the level of demand seen in 2015.
• However, with 73,000 m2
delivered to the market, supply
dwarfed demand and pushed the vacancy rate up from
9% to over 20%. With approximately 325,000 m2
expected to be completed by 2019, vacancy should
continue to climb.
• Rents have been stable through 2016. As the
Guadalajara market is relatively small, there has been little
pressure on landlords to lower rents.
Office market statistics
Total stock (m²) 254,000
Overall vacancy rate 20%
Production - 2016 (m²) 73,000
Net absorption – 2016 (m²) 22,000
Expected production – 2017 (m²) 215,000
Expected net absorption – 2017 (m²) 40,000
Class A rental range (USD/m²/mo.) 14-20
Class AB/B+ rental range (USD/m²/mo.) 11-17
Average purchase price range (USD/m²)$2,500 –
3,500
Stock, Production, and Vacancy by Submarket
Office Market Overview| Latin America | EY 2016
0%
10%
20%
30%
40%
50%
60%
70%
-
20.000
40.000
60.000
80.000
100.000
120.000
140.000
Americas Lopez Mateos Puerta deHierro
Vallarta
Vac
ancy
Rat
e
Re
nta
ble
Are
a(m
2 )
Stock
Under Construction
Planned
Vacancy Rate
Panamá – Panamá City
32
Macroeconomic overview
• Panamá´s economy remains one of the fastest growing in
Latin America, however it has slowed since several high
profile infrastructure projects reached completion, including
the expansion of the Panamá Canal and the construction of
the Panamá City Metro.
• Foreign Direct Investment has continued to grow over the
past years and should continue on that path.
• Inflation slowed to 0.7% in 2016, as Panamá is a net importer
of most goods and extractive materials.
• Panamá is fighting the OECD´s push for universal adoption
of the Common Reporting Standards (CRS), which would
require host nations to obtain all company information from
their financial institutions and share it with other nations.
Panamá earns considerable foreign investment by being a
financial “safe haven,” thus the CRS could undermine its
status as a global financial hub. Last year´s scandal
surrounding the Panamá Papers has led nations around the
world to further pressure Panamá to adapting the CRS, and
this could have important long-term implications.
Market trends
• Panamá has one of the world´s highest vacancy rates, as
speculative investment in office buildings has left 550,000 m2
– or nearly 40% of the market – vacant.
• Panamá has already reached the peak of its production
cycle, and new supply has been declining since 2014. 2016
saw the introduction of another 146,000 m2
to the market with
demand reaching 132,000 m2. The downward trend in new
supply will allow vacancy to fall over the foreseeable future.
• 2016 saw one of the highest levels of demand on record,
mostly driven by rents that have crashed, in some cases to
$15/m2/month for Class A buildings. The Obarrio submarket,
plagued by stifling traffic, has suffered the most while Costa
del Este has generally maintained high rents and high
demand.
Office market statistics
Total stock (m²) 1,400,000
Overall vacancy rate 39.5%
Production - 2016 (m²) 146,000
Net absorption – 2016 (m²) 132,000
Expected production – 2017 (m²) 137,000
Expected net absorption – 2017 (m²) 138,000
Class A rental range (USD/m²/mo.) 15-28
Class AB/B+ rental range (USD/m²/mo.) 13-21
Average purchase price range (USD/m²) $1,800 – 2,800
Historic production, absorption, and vacancy
Office Market Overview| Latin America | EY 2016
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
-
50.000
100.000
150.000
200.000
250.000
300.000
Vac
ancy
Rat
e
Re
nta
ble
Are
a (m
2)
Production (m2)
Absorption (m2)
Vacancy Rate (%) Forecast
Perú - Lima
33
Macroeconomic overview
• Despite falling commodity prices, Peru´s economy grew
by 3.4% in 2016 thanks to significant growth in the
mining sector as well as countercyclical fiscal measures
intended to boost private consumption.
• Expanding access to credit and wage increases
suggests that domestic demand and discretionary
spending should be strong in the short term. The Central
Bank has cut reserve requirements for banks with the
goal of further stimulating the slowing demand for credit.
• The election of the centrist Pedro Paulo Kuczynski – a
politician with extensive experience in the private, public,
and non-profit sectors - has further entrenched Latin
America´s recent turn to the right. The “PPK”
administration will prioritize growth with a focus on
investing in infrastructure, education, and health care.
• The scandal surrounding the Brazilian construction giant
Odebrecht has implicated former presidents Alejandro
Toledo and Ollanta Humala, who are accused of
accepting millions in campaign contributions in
exchange for infrastructure contracts.
Market trends
• Lima is one of Latin America´s most active real estate
markets at the moment. An office boom has reached its
peak in 2016, delivering 330,000 m2
to a market that has
quickly become oversupplied.
• High production has led to fast-rising vacancy rates. The
city vacancy rate, just 2 years at 4%, has now reached
20%. This has pushed rents down to their lowest point
since 2009.
• Office demand has fared well and exceeded
expectations. Low rents have stimulated a record
190,000 m2
of net absorption.
• The market is highly segmented with core submarkets
like San Isidro remaining stable but new submarkets like
Magdalena showing a vacancy rate near 50%.
Office market statistics
Total stock (m²) 1,797,000
Overall vacancy rate 20%
Production - 2016 (m²) 330,000
Net absorption – 2016 (m²) 190,000
Expected production – 2017 (m²) 208,000
Expected net absorption – 2017 (m²) 176,000
Class A rental range (USD/m²/mo.) 15-24
Class AB/B+ rental range (USD/m²/mo.) 11-20
Average purchase price range (USD/m²) $1,700 – 2,300
Historic production, absorption, and vacancy
Office Market Overview| Latin America | EY 2016
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
Vac
ancy
Rat
e
Re
nta
ble
Are
a (m
2)
Production (m2)
Net Absorption (m2)
Vacancy RateForecast
Puerto Rico – San Juan
34
Macroeconomic overview
• Puerto Rico´s decades-long economic contraction
continued in 2016. High operational costs and the
expiration of export tax credits have made the island
highly uncompetitive, resulting in high unemployment
and a monumental debt burden.
• Puerto Rico defaulted on a debt payment of
approximately USD $1 billion, leaving governor Ricardo
Rosello having to negotiate with the US Congress for
relief or restructuring. Without a bailout, the Puerto
Rican government contends that they will run out of
cash in 2017, leaving hospitals, schools, police forces,
and many others without means to finance themselves.
To add to the complexity of the issue, $15 billion of the
$70 billion in debt is owned by Puerto Ricans via
pensions and other investment funds. Therefore a
default would be a significant blow to the middle class.
• The US Congress created a commission to resolve the
island’s crisis and put it back on a track to financial
sustainability. The committee will oversee austerity
measures and has veto power over the governor of
Puerto Rico.
Market trends
• San Juan’s two most important office clusters are Hato
Rey - which contains about 44% of the office stock -
and Guaynabo, a newer submarket that offers larger
floor plates, more parking, and less traffic congestion.
• Vacancy is lowest among Class A buildings (around
11%) and higher for Class B (19%) and Class C (30%).
• The market continues to be tenant-favorable. Investors,
users, and corporate clients are taking advantage,
using sub-leases and early contract re-negotiations.
• With some Class A properties maintaining relatively
high occupancy, investors are looking to take
advantage of low asset prices to acquire properties that
can provide a solid yield.
Office market statistics
Total stock (m²) 768,000
Overall vacancy rate 22.8%
Production - 2016 (m²) 0
Net absorption – 2016 (m²) -12,000
Expected production – 2017 (m²) 0
Expected net absorption – 2017 (m²) -8,000
Class A rental range (USD/m²/mo.) 16-20
Class AB/B+ rental range (USD/m²/mo.) 14-17
Average purchase price range (USD/m²) $1,600 – 2,800
Office Market Overview| Latin America | EY 2016
*Rents in San Juan are typically quoted in ft2, but are stated in m2 in this report for
consistency and comparative purposes.
0%
5%
10%
15%
20%
25%
(40.000)
(30.000)
(20.000)
(10.000)
-
10.000
20.000
30.000
Vac
ancy
Rat
e
Re
nta
ble
Are
a(m
2)
Production (m2)
Absorption (m2)
Vacancy
Forecast
Historic production, absorption, and vacancy
Uruguay - Montevideo
35
Macroeconomic overview
• In the third quarter of 2016, Uruguay´s economy
expanded 2.0% Y-o-Y. The acceleration was driven by
an improvement in both domestic demand and the
external sector.
• Private consumption showed an increase of 0.7%
compared to the previous quarter.
• In Q3 2016 the economy showed a deceleration of fixed
investment, mainly due to the fall of the public
construction activity. Nevertheless, private investment
saw considerable growth.
• Exports and imports saw contrasting performance in
2016. While exports increased due to the higher
external demand for food products, imports registered
a decline of 0.2% - mainly as a result of lower imports
for intermediate goods, a fall in fuel prices, and a drop
in outbound tourism.
Market trends
• During the last ten years, the office market in Uruguay
has shown a stable but slow dynamic in terms of stock
growth.
• In 2016, there was no new production and net
absorption reached 7,500 m2.
• Vacancy continued to show a decreasing trend. In
2016 the vacancy was in the range of 8-12%. On the
other hand, rents registered a very wide range.
• Class A/AB rents reached USD 22-30/m²/month. Free
Trade Zones (FTZ) rents ranged from USD 18-
45/m²/month.
• Production is expected to rise, particularly in
Montevideo´s Free Trade Zone market.
Office market statistics
Total stock (m²) 226,000
Overall vacancy rate 10%
Production - 2016 (m²) 0
Net absorption – 2016 (m²) 7,500
Expected production – 2017 (m²) 9,200
Expected net absorption – 2017 (m²) 10,000
Class A rental range (USD/m²/mo.) 22-30
Class AB/B+ rental range (USD/m²/mo.) 18-25
Average purchase price range (USD/m²)$3,400 –
4,100
Evolution of Rents
Office Market Overview| Latin America | EY 2016
0
5
10
15
20
25
30
35
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
US
D/m
2/m
onth
Class A Avg
Class B+ Avg
Venezuela - Caracas
36
Macroeconomic overview
• According to independent analysts, the Venezuelan economy
contracted by approximately 9.3% in 2016, making it one of the
worst performing economies in the world.
• The fall in oil prices, which account for over 90% of Venezuelan
exports, has devastated government balances, putting social
programs in jeopardy and exacerbating the shortage of dollars
available for exchange. The scarcity of dollars has made it
difficult to import goods or inputs, leading many companies to
simply cease operations in order to not lose money. This has
driven runaway inflation that surpassed 500% by the end of
2016.
• Amid widespread shortages and an economic catastrophe, the
ruling party has doubled down on its policies and rhetoric,
accusing its opponents of engaging in an “economic war” and
using this as a pretext to consolidate power. Government
bodies such as the Electoral Council and the Supreme Court
are being used to institutionalize the ruling party´s power and
suppression of the opposition.
Market trends
• The economic crisis is provoking considerable real estate
investment, as people and businesses would rather invest their
money in real estate than store it in the banking system where it
would be eroded by inflation.
• Production reached 30,000 m2
in 2016 and looks poised to
grow over the next few years as several large projects will be
completed, including Centro Empresarial La Esmeralda (70,000
m2), Paseo la Castellana (20,000 m
2), and Oasis Los Ruices
(26,000 m2).
• Net absorption for 2016 was 25,000 m2, a slight increase over
2015 levels.
• The northeast suburbs of Los Ruices and Boleita are
increasingly consolidating, as low value industrial land is
redeveloped for office use.
Office market statistics
Total stock (m²) 1,208,000
Overall vacancy rate 7%
Production - 2016 (m²) 55,000
Net absorption – 2016 (m²) 35,000
Expected production – 2017 (m²) 25,000
Expected net absorption – 2017 (m²) 35,000
Class A rental range (USD/m²/mo.) 20-35*
Class AB/B+ rental range (USD/m²/mo.) 18-30*
Average purchase price range (USD/m²) $2,000 – 6,500*
Annual GDP Growth and Inflation
Office Market Overview| Latin America | EY 2016
-400
-200
0
200
400
600
800
-10%
-5%
0%
5%
10%
15%
20%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 CP
I In
flat
ion
, Yo
-o-Y
An
nu
al G
DP
Gro
wth
GDP Pct. Growth
CPI, year end
* Assuming parallel exchange rate of VEF 3,700 / 1 USD
Argentina Brazil Chile Colombia
Unit Of
Measurement
Square meters Square meters Square meters Square meters
Rent Units USD/m²/month R$/m²/month (Brazilian
Real)
Unidades de Fomento (UF), a
quasi-currency adjusted daily
according to the local CPI. For
more information visit
www.bcentral.cl
COP/m²/month (Colombian
Pesos)
Typical Lease
Term
3-5 Years 5 Years 3-5 Years 5 years
Frequency of Rent
Payment
Monthly Monthly Monthly Monthly
Deposit/Guarantee Case-by-case
(typically 2-3 months
depending on tenant)
Bank guarantee /
guarantor / secure bail
Case-by-case (typically 1-3
months’ rent)
Insurance policy typically
requested
Statutory Right to
Renew
No (unless an option
to renew is agreed at
outset and specified
in lease)
After 5 years per Brazilian
law.
No (unless an option to renew
is agreed at the outset and
specified in the lease)
Yes; length of renewal term
typically specified in lease
Basis of Rent
Increases or Rent
Review
Case-by-case,
explicit indexation by
CPI is prohibited by
law.
Annual increase of CPI.
After 3 years or upon
renewal, the parties gain
the right of rent review, to
bring it back to market
rates
In UF, indexed daily Annual increases of CPI + (0% -
3%)
Rent Free Period 1-3 Months Case-by-case, often 1-3
months
Case-by-case, often 1-3
months
1-3 Months
Car Parking City: 1 per 100 m²
Province: 1 per 60 m²
A & AB Buildings - 1:35
m²
UF 3-4.5/unit/month (US
$140-210)
1 per 50 m²
Service Charges-
Mgmt. Fees
Additional to rental
charge and payable
monthly in advance
Additional to the rental
charge and payable
monthly in advance
Additional to the rental charge
and payable monthly in
advance
Additional to rental charge,
payable monthly
Service Charges-
Common Areas
Payable by landlord
(via tenant service
charge)
Additional to the rental
charge and payable
monthly in advance
Payable by landlord (via
tenant service charge)
Payable by landlord (via tenant
service charge)
Service Charges-
Building Insurance
Payable by landlord Payable by landlord (via
tenant service charge)
Payable by landlord (via
tenant service charge)
Payable by landlord
Sub-letting &
Assignment
Normally yes (subject
to landlord approval)
Case by case Normally yes (subject to
landlord approval)
Normally yes (subject to LL
approval)
Early Termination After 6 months, 1.5
months of rent
penalty; After 1 year,
1 months of rent
penalty
Normally tenant pays 3
month of rent penalty,
reduced in proportion to
the elapsed time of the
contract.
Non typically in this market
however they can negotiated.
Termination after year 3 of the
term with a penalty of 6 or 12
months´ rent is not
uncommon.
Tenant is responsible for entirety
of contract unless otherwise
stipulated in contract.
Termination after year 3 with a 6
month rent penalty is typical.
Tenant
Reinstatement
Responsibilities
Original condition,
allowing for normal
wear and tear
Original condition or case
by case
Original condition Original condition, allowing for
normal wear and tear
Appendix: Comparison of tenant leasing practices
37 Office Market Overview| Latin America | EY 2016
38
Costa Rica Ecuador Mexico Panamá
Unit Of
Measurement
Square meters Square meters Square meters Square meters
Rent Units USD/m²/month USD/m²/month USD/m²/month USD/m²/month
Typical Lease
Term
3-5 Years 3-5 years 3-5 Years 3-5 Years
Frequency of Rent
Payment
Monthly Monthly Monthly Monthly
Deposit/Guarantee Case-by-case,
insurance policy
covering the contract is
typical
Case-by-case
(typically 2-3 months)
Typical deposit is two months
rent
Not customary to have
insurance covering contract.
Case-by-case, insurance policy
covering the contract is typical
Statutory Right to
Renew
No (unless an option to
renew is agreed at the
outset and specified in
the lease)
No (unless option to
renew is agreed at
outset and specified in
lease)
No No (unless an option to renew is
agreed at the outset and
specified in the lease)
Basis of Rent
Increases or Rent
Review
Case-by-case, though
typically some indexed
percentage of CPI
CPI + (0% - 3%) US Consumer Price Index,
unless rent quoted in Pesos,
then Mexican Consumer Price
Index
Case-by-case, though typically
some indexed percentage of CPI
Rent Free Period Usually only the time for
the build out (about 2
months)
1-3 Months Case-by-case Case-by-case, typically 1-3
months
Car Parking 1 per 25-50m²,
depending on
submarket
1 per 50 m² 1 per 30 m² 1 per 55 m², though newer
buildings offer more parking
Service Charges-
Mgmt. Fees
Additional to the rental
charge and payable
monthly in advance
Additional to rental
charge, payable
monthly
Tenant responsible, additional
to the rental charge and
payable monthly in advance
Fixed rate base on pro-rata
share Reconciled annually
Additional to the rental charge
and payable monthly in advance
Service Charges-
Common Areas
Payable by landlord (via
tenant service charge)
Payable by landlord
(via tenant service
charge)
Payable by landlord (via
tenant service charge)
Payable by landlord (via tenant
service charge)
Service Charges-
Building Insurance
Payable by landlord Payable by landlord Payable by landlord (via
tenant service charge)
Payable by landlord
Sub-letting &
Assignment
Normally yes (subject to
landlord approval)
Normally yes (subject
to LL approval)
Not customary and always
subject to Landlord approval
for both subleasing and
assignment
Normally yes (subject to landlord
approval)
Early Termination Legally tenants can exit
after the first year
without penalty. To
avoid this LL can
demand fully bondable
lease agreements.
Tenant is responsible
for entirety of contract
unless otherwise
stipulated in contract
Negotiable (with termination
fees)
Unless otherwise stipulated in the
rental contract, tenant is
responsible for paying entirety of
contractual obligation.
Tenant
Reinstatement
Responsibilities
Original condition,
allowing for normal wear
and tear
Original condition,
allowing for normal
wear and tear
Original condition, allowing for
normal wear and tear
Original condition, allowing for
normal wear and tear
Appendix: Comparison of tenant leasing practices
Office Market Overview| Latin America | EY 2016
39
Peru Puerto Rico Uruguay Venezuela
Unit Of
Measurement
Square meter Square feet Square meters Square meter
Rent Units USD/m²/month USD/ft2/month USD/m²/month VEF/m²/month (Venezuelan
Bolivares)
Typical Lease
Term
3-5 Years 5-15 Years 5 Years Variable
Frequency of Rent
Payment
Monthly Monthly Monthly Monthly
Deposit/Guarantee Case-by-case, usually 2
months rent are required
Case-by-case, though it is
typical
Case-by-case, typically
6 to 12 months backed
by bank guarantee or
cash deposit
(depending on tenant)
Case-by-case, insurance
policy covering the contract is
typical
Statutory Right to
Renew
No (unless an option to
renew is agreed at the
outset and specified in
the lease)
No (unless an option to renew
is agreed at the outset and
specified in the lease)
No (unless an option to
renew is agreed at
outset and specified in
lease)
Yes, renewal term depends on
previous tenure
Basis of Rent
Increases or Rent
Review
Case-by-case, though
typically some indexed
percentage of CPI
Case-by-case, though
typically some indexed
percentage of CPI
Case-by-case, generally
adjusted using
Consumer Price Index
Case-by-case, though often
indexed as some percentage
of CPI
Rent Free Period Case-by-case, typically 1-
3 months. While this
often occurs, it is not
standardized in Lima and
is usually dependent on
tenant improvement
allowances provided.
Case-by-case, typically 1-6
months. While this often
occurs, it is not standardized
in Lima and is usually
dependent on tenant
improvement allowances
provided.
Case-by-case Typically 1-3 months for the
build-out; 2 months is most
common
Car Parking US $150-
200/space/month
depending on submarket
Paid separately; typically
$80/month for surface lots
and $100/month for covered
space
Included in rent if
building has parking
spaces, additional
contract is necessary
otherwise
1 space per 20-35 m²
Service Charges-
Mgmt. Fees
Additional to the rental
charge and payable
monthly in advance
Additional to the rental charge
and payable monthly in
advance
Additional to the rental
charge and payable
monthly in advance
Additional to the rental charge
and payable monthly in
advance
Service Charges-
Common Areas
Payable by landlord (via
tenant service charge)
Payable by landlord (via
tenant service charge)
Payable by landlord (via
tenant service charge)
Payable by landlord (via tenant
service charge)
Service Charges-
Building Insurance
Payable by landlord Payable by landlord (via
tenant service charge)
Payable by landlord (via
tenant service charge)
Payable by landlord
Sub-letting &
Assignment
Normally yes (subject to
landlord approval)
Normally yes (subject to
landlord approval)
Normally yes (subject to
landlord approval)
Normally yes (subject to
landlord approval)
Early Termination Case-by-case charming Unless otherwise stipulated in
the rental contract, tenant is
responsible for paying entirety
of contractual obligation.
Case-by-case Legally tenants can exit after
the first year without penalty.
To avoid this, LL can demand
fully bondable lease
agreements.
Tenant
Reinstatement
Responsibilities
Original condition,
allowing for normal wear
and tear
Original condition, allowing for
normal wear and tear
Original condition,
allowing for normal wear
and tear
Original condition, allowing for
normal wear and tear
Appendix: Comparison of tenant leasing practices
Office Market Overview| Latin America | EY 2016
Contacts:
Latin America:
Northern Cone, Central America, Caribbean
Scott Figler
Senior Consultant
http://latinamerica.am.joneslanglasalle.com
Want more information?
40
Brazil
Ricardo Hirata
Head of Research, Brazil
http://www.joneslanglasalle.com.br
Latin America:
Southern Cone
Martin Potito
Associate Director, Latin America
http://latinamerica.am.joneslanglasalle.com
Mexico
Gabriela Morales Fernandez
Market Research Manager, Mexico
http://www.joneslanglasalle.com.mx
Chile
Felipe Acevedo
Associate Director, Chile
http://latinamerica.am.joneslanglasalle.com
Office Market Overview| Latin America | EY 2016
About JLL
JLL (NYSE: JLL) is a leading professional services firm
that specializes in real estate and investment
management. A Fortune 500 company, JLL helps real
estate owners, occupiers and investors achieve their
business ambitions. In 2016, JLL had revenue of $6.8
billion and fee revenue of $5.8 billion and, on behalf of
clients, managed 4.4 billion square feet, or 409 million
square meters, and completed sales acquisitions and
finance transactions of approximately $136 billion. At
year-end 2016, JLL had nearly 300 corporate offices,
operations in over 80 countries and a global
workforce of more than 77,000. As of December 31,
2016, LaSalle Investment Management has $60.1
billion of real estate under asset management. JLL is
the brand name, and a registered trademark, of Jones
Lang LaSalle Incorporated. For further information,
visit www.jll.com.
About JLL Research
JLL’s research team delivers intelligence, analysis and
insight through market-leading reports and services
that illuminate today’s commercial real estate
dynamics and identify tomorrow’s challenges and
opportunities. Our more than 400 global research
professionals track and analyze economic and
property trends and forecast future conditions in over
60 countries, producing unrivalled local and global
perspectives. Our research and expertise,
fueled by real-time information and innovative thinking
around the world, creates a competitive advantage for
our clients and drives successful strategies and
optimal real estate decisions.
© 2017 Jones Lang LaSalle IP, Inc.
All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy
thereof.