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 | Jun 16, 2021
Construction input prices rise 4.6% in May; softwood lumber prices up 154% from a year ago
Construction input prices are 24.3% higher than a year ago, while nonresidential construction input prices increased 23.9% over that span.
Market Data | Jun 16, 2021
Producer prices for construction materials and services jump 24% over 12 months
The 24.3% increase in prices for materials used in construction from May 2020 to last month was nearly twice as great as in any previous year
Market Data | Jun 15, 2021
ABC’s Construction Backlog inches higher in May
Materials and labor shortages suppress contractor confidence.
Market Data | Jun 11, 2021
The countries with the most green buildings
As the country that set up the LEED initiative, the US is a natural leader in constructing green buildings.
Market Data | Jun 7, 2021
Construction employment slips by 20,000 in May
Seasonally adjusted construction employment in May totaled 7,423,000.
Market Data | Jun 2, 2021
Construction employment in April lags pre-covid February 2020 level in 107 metro areas
Houston-The Woodlands-Sugar Land and Odessa, Texas have worst 14-month construction job losses.
Market Data | Jun 1, 2021
Nonresidential construction spending decreases 0.5% in April
Spending was down on a monthly basis in nine of 16 nonresidential subcategories.
Market Data | Jun 1, 2021
Nonresidential construction outlays drop in April to two-year low
Public and private work declines amid supply-chain woes, soaring costs.
Market Data | May 24, 2021
Construction employment in April remains below pre-pandemic peak in 36 states and D.C.
Texas and Louisiana have worst job losses since February 2020, while Utah and Idaho are the top gainers.
Market Data | May 19, 2021
Design activity strongly increases
Demand signals construction is recovering.
