Office Market Climbs In Q2, Back From Q1 Slump
The office market climbed in Q2, and industry experts predict it will continue to work its way back from the traditional first-quarter dive to full performance by the middle of the year.
US office vacancies dropped below 16% in Q1 and declined by 10 basis points, the lowest rates since the recession started seven years ago. The increased leasing for Q2 was mostly due to a 46% increase in tenant growth, such as corporate expansions and growth in certain industries like tech and finance, JLL notes in a recent report. Nationally, there is more than 100M SF of new construction underway, and rents increased by 1% in Q2 compared to the previous quarter, National Real Estate Investor reports.
“Large, name-brand firms are opening new offices in primary and secondary markets, trying to tap into new talent pools. In some places, the high-demand urban core is becoming too expensive, and tenants are looking for fringe areas,” JLL VP Julia Georgules says. [NREI]