by Dan Rafter
The recession hit the office market hard, and this commercial real estate sector is still trying to recover.
That’s the bad news. The good news? According to the latest research from Marcus & Millichap, that recovery is underway in full force.
Marcus & Millichap’s 2015 national office report predicts plenty of strong numbers for the office market across the country this year. According to Marcus & Millichap, the national office vacancy rate should fall by 80 basis points by the time this year ends, dropping to 14.5 percent.
Those falling vacancies will result in rising rent growth. Marcus & Millichap predicts that asking rents will rise 4.1 percent this year for office space across the country.
Demand for office space should be strong throughout this year, according to the numbers. Marcus & Millichap predicts that the office market will see net absorption of 104 million square feet in 2015.
Most of the markets expected to see especially low office vacancy rates are not in the Midwest, with three exceptions. Marcus & Millichap says that office vacancy rates in Nashville, Louisville and Columbus will be lower than the U.S. average of 14.5 percent.
The news wasn’t as good for Cincinnati, Chicago and Detroit. These three markets should have some of the highest office vacancy rates in the country, with Marcus & Millichap predicting that Detroit’s rate of office vacancies will rank second overall in the United States in 2015.
Still, the Marcus & Millichap report is mostly good news for the office market. And that, of course, is good news for commercial real estate in general.