U.S. Office Vacancies Tighten, With Suburban Markets Seeing The Largest Decline
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Robust demand drove nationwide office vacancies down in the third quarter, and suburban markets led the decline.
As municipalities push to build larger communities that cater to the live-work-play synergy that young professionals desire, suburban markets are reaping the benefits. Suburban office has experienced positive absorption for several years and in Q3, vacancy rates declined 20 basis points — down to 14.1%, CBRE reports.
Vacancies in downtown markets decreased 10 basis points to 10.6%.
“The slow, steady improvement in the office market continued in the third quarter after a second quarter pause. Demand remains positive, but modest,” CBRE Americas Chief Economist Jeffrey Havsy said in a statement.
The modest demand is in line with predictions cast earlier this year, which projected a mild slowdown following 2016’s strong office environment.
The largest declines in the country were in Trenton, New Jersey, Las Vegas and Phoenix. Vacancies also continued to tighten in midsize markets, such as Tucson, Arizona; Las Vegas; Albuquerque, New Mexico; Louisville, Kentucky; Orlando, Florida; Richmond, Virginia; Detroit; Sacramento, California; Phoenix; Memphis; and Jacksonville, Florida.