US Office Rebounds, Vacancies Drop
AUGUST 11, 2016 | BY PAUL BUBNY | GlobeSt.com
Reports from Avison Young and Lee & Associates note that a handful of the largest office markets account for the lion’s share of new construction.
After a sluggish first quarter, the US office market saw a return to form in Q2, according to reports from Lee & Associates and Avison Young. The two firms reported declines in vacancy nationwide during Q2, increases in absorption and upward trends in asking rents.
Employing different yardsticks, Lee reported a 20-basis point decline in vacancy from Q1, with the office market nationwide finishing Q2 at 10.1%. AY’s report describes a 40-bp decline on a year-over-year basis to 12.7%.
That’s an average, of course; AY cites rates in individual markets that came in considerably lower during the quarter. “The cluster of Northern California downtown markets—San Francisco, Oakland and San Mateo—reported extremely low vacancies of 5.5%, 3.9% and 1.7%, respectively,” according to AY. And in New York City, the nation’s largest downtown market with 443 million square feet, vacancy improved by 40 bps falling to single digits (9.6% vacant).”
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