Home > Market Info & Statistics > Office Sector Gains Ground in 2Q13 | CCIM Institute

Office Sector Gains Ground in 2Q13 | CCIM Institute


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Office Sector Gains Ground in 2Q13 Posted July 11th 2013 The U.S. office sector experienced its third-strongest quarter since 2010 in 2Q13, absorbing 15.1 million square feet of space, according to Cassidy Turley. Vacancy rates fell 10 basis points during the same period to 15.3 percent — 1.9 percent below the recessionary peak. “Even though there is a general push for space efficiency across most markets, business growth has been strong enough to generate consistent improvement in the office-leasing fundamentals,” said Kevin Thorpe, chief economist at Cassidy Turley. “The demand metrics continue to be the strongest at the high end class A and the low end class C of the market, while the middle segment of the market continues to struggle to retain existing tenants or find new ones.”Average asking rents reached $21.74 in 2Q13, up 3 cents year over year. New office construction increased slightly during the second quarter as well.“It is interesting to observe that tenants are consistently gravitating to newer buildings, and yet, that segment remains supply constrained,” Thorpe said. “New development remains 30 percent below the norm. So this one sliver of the market, new space, is entering into a tight supply/strong demand scenario. Rents could very well soar for the new office space that delivers to the market over the next 12-24 months.”

The Top 10 Office Markets in 2Q13, based on absorption
1.New York, 1.7 msf
2.San Jose, Calif., 1.2 msf
3.Houston, 1.1 msf
4.Atlanta, 800,000 sf
5.Chicago, 780,000 sf
6.Omaha, Neb., 703,000 sf
7.Oakland, Calif., 672,000 sf
8.Central N.J., 622,000 sf
9.Anaheim, Calif., 580,000 sf
10.Northern N.J., 470,000 sf
– See more at: http://www.ccim.com/newscenter/323136/2013/07/11/office-sector-gains-ground-2q13#sthash.MCnQVcEl.dpuf t

via Office Sector Gains Ground in 2Q13 | CCIM Institute.

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