Transwestern’s latest national office report reflects resilience in market fundamentals, even in the face of the moderating pace of U.S. economic growth demonstrated by net job creation averaging 172,000 per month for the first half of the year. In this environment, the national vacancy rate held steady at 9.7% in the second quarter thanks to healthy preleasing levels of newly delivered office assets.
“Signals continue to point to a disciplined office market that will perform well through year-end,” said Elizabeth Norton, Managing Director of Research at Transwestern. “Especially noteworthy is that in the second quarter, annual asking rental rates grew 4.2% year over year, the fastest rate this cycle and well above the five-year average of 3.4%.”
At quarter end, the average asking rental rate was $26.83 per square foot. Annual rent growth has been strongest in Tampa, Florida (10.6%), followed by Nashville, Tennessee (9.5%); San Jose/Silicon Valley, California (9.4%); Austin, Texas (8.8%); and San Francisco (8.8%).
Additionally, net absorption more than doubled to 24 million square feet in the second quarter despite sublet space adding 1.9 million square feet back to available inventory. Absorption leaders during the past year include Seattle; Charlotte, North Carolina; Dallas-Fort Worth; Los Angeles; and Northern Virginia. Seattle posted nearly 6 million square feet of absorption during the past 12 months, bringing the metro’s vacancy rate down to 6.1%, the fourth-lowest of the 49 markets tracked by Transwestern.
Office construction activity hit its highest level of this cycle, growing 9.6% during the prior 12 months. The second quarter saw more than 21.7 million square feet of new space added to inventory, and this pace will continue through the remainder of the year. Currently, 163.6 million square feet is in the pipeline nationally.
Download the full Second Quarter 2019 U.S. Office Market Report at: http://twurls.com/us-office-
Related Stories
Market Data | Sep 20, 2021
August construction employment lags pre-pandemic peak in 39 states
The coronavirus delta variant and supply problems hold back recovery.
Market Data | Sep 15, 2021
ABC’s Construction Backlog Indicator plummets in August; Contractor Confidence down
ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels all fell modestly in August.
Market Data | Sep 7, 2021
Construction sheds 3,000 jobs in August
Gains are limited to homebuilding as other contractors struggle to fill both craft and salaried positions.
Market Data | Sep 3, 2021
Construction workforce shortages reach pre-pandemic levels
Coronavirus continues to impact projects and disrupt supply chains.
Multifamily Housing | Sep 1, 2021
Top 10 outdoor amenities at multifamily housing developments for 2021
Fire pits, lounge areas, and covered parking are the most common outdoor amenities at multifamily housing developments, according to new research from Multifamily Design+Construction.
Market Data | Sep 1, 2021
Construction spending posts small increase in July
Coronavirus, soaring costs, and supply disruptions threaten to erase further gains.
Market Data | Sep 1, 2021
Bradley Corp. survey finds office workers taking coronavirus precautions
Due to the rise in new strains of the virus, 70% of office workers have implemented a more rigorous handwashing regimen versus 59% of the general population.
Market Data | Aug 31, 2021
Three out of four metro areas add construction jobs from July 2020 to July 2021
COVID, rising costs, and supply chain woes may stall gains.
Market Data | Aug 24, 2021
July construction employment lags pre-pandemic peak in 36 states
Delta variant of coronavirus threatens to hold down further gains.
Market Data | Aug 17, 2021
Demand for design activity continues to expand
The ABI score for July was 54.6.
