The U.S. office market continues to be one of the economy’s growth sectors, based on what the national real estate firm Transwestern gleans from the 48 of its markets that reported first-quarter results.
More than 45% of those markets—22, to be exact—registered improvements in direct vacancy, and 30 recorded increased in direct and sublet vacancy in the first quarter.
Overall, the office market’s vacancy rate, at 9.7% in the latest quarter, remained stable compared to the same period a year ago. And the vacancy rates were considerably lower in some of the country’s hottest real estate markets, such as Seattle (8.2%), Orlando (7.8%), Tampa (7.9%), and San Francisco (8.2%).
San Francisco was also the first-quarter leader in new absorptions, at more than 1.5 million sf, followed by Seattle, Dallas/Fort Worth, and San Jose, which was the leader in trailing four-quarters net absorption (nearly 7 million sf).
San Jose, Charlotte, Manhattan, and San Francisco were among the leading metros in terms of first-quarter office absorption and rent appreciation. Image: Transwestern U.S. Markets | Offices
All told, the U.S. market absorbed 14.1 million sf of office space in the first three months of 2018. That makes 31 consecutive quarters of positive absorption growth, although the absorption rate still lags three- and five-year quarterly averages.
Conversely, 1Q18 represented the fourth straight quarter of declines in new office construction, which stood at 141.1 million sf that period. Manhattan is by far and away the most active office construction market in the country, with nearly 18 million sf in starts in the first quarter. (Manhattan also has 432.9 million sf of office inventory, whose vacancy rate was 9.1%.) The next closest construction market, DFW, had 8.29 million sf in starts. (DFW’s vacancy rate was 16.7% in the first quarter.)
(The average new construction starts for Transwestern’s markets were 2 million sf.)
The number of office employees rose to 36 million, representing a 1.9% annual growth rate.
Transwestern states that the average asking rents continued to climb in the first quarter, marking the 20th consecutive month of increases. Charlotte, N.C., saw the biggest jump in asking rents, to 15.3%, followed by East Bay/Oakland, Calif. (9.5%) and Atlanta (7.7%).
Related Stories
Retail Centers | Apr 4, 2024
Retail design trends: Consumers are looking for wellness in where they shop
Consumers are making lifestyle choices with wellness in mind, which ignites in them a feeling of purpose and a sense of motivation. That’s the conclusion that the architecture and design firm MG2 draws from a survey of 1,182 U.S. adult consumers the firm conducted last December about retail design and what consumers want in healthier shopping experiences.
Market Data | Apr 1, 2024
Nonresidential construction spending dips 1.0% in February, reaches $1.179 trillion
National nonresidential construction spending declined 1.0% in February, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.179 trillion.
Market Data | Mar 26, 2024
Architecture firm billings see modest easing in February
Architecture firm billings continued to decline in February, with an AIA/Deltek Architecture Billings Index (ABI) score of 49.5 for the month. However, February’s score marks the most modest easing in billings since July 2023 and suggests that the recent slowdown may be receding.
K-12 Schools | Mar 18, 2024
New study shows connections between K-12 school modernizations, improved test scores, graduation rates
Conducted by Drexel University in conjunction with Perkins Eastman, the research study reveals K-12 school modernizations significantly impact key educational indicators, including test scores, graduation rates, and enrollment over time.
MFPRO+ News | Mar 16, 2024
Multifamily rents stable heading into spring 2024
National asking multifamily rents posted their first increase in over seven months in February. The average U.S. asking rent rose $1 to $1,713 in February 2024, up 0.6% year-over-year.
Market Data | Mar 14, 2024
Download BD+C's March 2024 Market Intelligence Report
U.S. construction spending on buildings-related work rose 1.4% in January, but project teams continue to face headwinds related to inflation, interest rates, and supply chain issues, according to Building Design+Construction's March 2024 Market Intelligence Report (free PDF download).
Contractors | Mar 12, 2024
The average U.S. contractor has 8.1 months worth of construction work in the pipeline, as of February 2024
Associated Builders and Contractors reported that its Construction Backlog Indicator declined to 8.1 months in February, according to an ABC member survey conducted Feb. 20 to March 5. The reading is down 1.1 months from February 2023.
Market Data | Mar 6, 2024
Nonresidential construction spending slips 0.4% in January
National nonresidential construction spending decreased 0.4% in January, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.190 trillion.
Multifamily Housing | Mar 4, 2024
Single-family rentals continue to grow in BTR communities
Single-family rentals are continuing to grow in built-to-rent communities. Both rent and occupancy growth have been strong in recent months while remaining a financially viable option for renters.
MFPRO+ News | Mar 2, 2024
Job gains boost Yardi Matrix National Rent Forecast for 2024
Multifamily asking rents broke the five-month streak of sequential average declines in January, rising 0.07 percent, shows a new special report from Yardi Matrix.
