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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]
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