Surprising no one, Colvill’s Office Properties’ Q4 report on the state of the office market showed softness. Class-A occupancy ended the year at 79.5%, down from 85.9% in Q4 '14.
Leasing activity was flat in 2015, though buildings that were under construction and had already signed new leases delivered, giving the appearance of absorption.
The good news: Because many tenants made leasing decisions in early 2014 when times were good, there will be limited rollover lease expirations in 2015 and 2016. Energy tenants are signing short-term extensions while they wait to see what 2016 and beyond bring. Colvill predicts this might result in a mini-boom in 2017 as pent-up demand spikes.
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