by Dan Rafter
Office vacancies across their country dropped to their lowest point in five years in the second quarter of this year.
That’s the good news from the second-quarter office snapshot released by Cushman & Wakefield.
And even better news? Cushman & Wakefield officials say that the office vacancies should continue to fall in the coming months.
“We continue to see positive trends in the nation’s office market, and we anticipate that will continue throughout 2014,” said Maria Sicola, Cushman & Wakefield Research for the Americas.
According to the Cushman & Wakefield report, the nation’s 44 major office markets continue to see falling vacancies, stable asking rents and strong leasing activity.
Sicola points to a national economy that is finally generating more jobs. This has resulted in greater demand for office space across the country, Sicola said.
The combined CBD office vacancy rates across the nation fell to 12.7 percent in the second quarter, according to Cushman & Wakefield. That’s a dip of 70 basis points when compared to the same quarter in 2013. In suburban markets, the vacancy rate on year-over-year basis fell 60 basis points to 16.8 percent.
Net office absorption year-to-date totaled 10.5 million square feet in the nation’s CBDs, Cushman & Wakefield reported, and 10.3 million square feet in the suburbs in the second quarter.
The increased office demand has led to stronger rents. Cushman & Wakefield reported that asking rents were up 3.1 percent in the second quarter whem compared to the same quarter one year earlier, averaging $47.39 a square foot. In the suburbs, asking rents jumped by 3.9 percent from the second quarter of last year to the second of 2014, hitting $29.51 a square foot.
Sicola said that she expects the recovery in the office market to continue throughout 2014 “contingent upon the absence of any unforeseen economic or geopolitical events. But we are optimistic that the economy will continue to add jobs for the foreseeable future.”