Slow but steady. Those were the encouraging — but also slightly discouraging — words that Cassidy Turley used to describe the recovery of the U.S. office market in its most recent look at this still-troubled commercial sector.
According to the report, the U.S. office sector is recovering. But it’s not doing so at a particularly quick pace.
You can forgive commercial brokers and developers for not getting too excited.
According to the Cassidy Turley report, the office sector saw a net absorption of 11.9 million square feet of space in the second quarter of 2012. That’s up from an absorption of 7.8 million square feet in the first quarter of the year.
But when you look at the years before the recession, this recovery rate doesn’t look so impressive. According to Cassidy Turley, today’s current pace of absorption in the office sector is about half of what of the demand levels this sector saw during the boom days of 2004 through 2006.
In good news, though, the office sector vacancy rate throughout the country fell to 15.7 percent in the second quarter, down 20 basis points from the first quarter of this year. This marks the seventh consecutive quarter in which vacancy rates have fallen.
And rents? They’re actually rising. Cassidy Turley reported that asking rents hit $21.70 a square foot in the second quarter, a jump of five cents from the previous quarter.
Of course, a nickel improvement, again, isn’t cause for celebration. But at least the trend in office is moving in the right direction.
And today? You can’t ask for much more than that.
— Dan Rafter