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US Office: Demand Keeps Outpacing Supply

July 5, 2016

 

 


US Office: Demand Keeps Outpacing Supply

CALABASAS, CA—Among office markets driven by the tech sector, San Jose has been a winner in both vacancy declines and rent growth; Marcus & Millichap reports that Silicon Valley’s peers have seen more variable results.

 

Downtown San Jose; the city and the surrounding Silicon Valley have seen double-digit rent growth. (Photo: Team San Jose)

 

The US office sector at midyear is poised for continued growth, Marcus & Millichap says in a new report. Thanks to ongoing expansion in a number of office-using employment sectors as well as a slower pace of new deliveries, the national vacancy rate is expected to keep ticking downward while rent growth is expected to average 3.9% for the year—and considerably more in tech hubs.

The report notes that office-using employment recovered early following the downturn and is now up by 1.8 million workers over the pre-recession peak. While professional and business services remains the largest office-using employment sector, Marcus & Millichap sees an incremental lift in demand coming from other industries.

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Gil Armour, CFP
February 3, 2016

I have been using Blue Vault Partners for the past five years.  I have found them to be a valuable, unbiased resource when it comes to evaluating and comparing non-traded REITs.  The reports help me analyze which sponsors are doing a responsible job of managing their offerings.  This allows me to limit my REIT recommendations to only the most competitive products, and then track those REITs throughout their life cycle.