U.S. Office Market Shows Strong First Quarter
The U.S. office market started the year off strong, despite the angst over the housing slump, the manufacturing slowdown and the general economic malaise, to post another strong quarter.
By CleanLink Editorial Staff
The U.S. office market started the year off strong, despite the angst over the housing slump, the manufacturing slowdown and the general economic malaise, to post another strong quarter.
According to Grubb & Ellis, of the 50 major markets tracked in detail, 21 posted vacancy declines in the first quarter. The vacancy rate ended the first quarter at 13.3 percent, down a surprisingly sharp 30 basis points from the prior quarter and 100 basis points from the year ago quarter.
Vacancy was lowest in New York at 5.3 percent and highest in Detroit at 21.3 percent, according to Grubb & Ellis. Over the past four quarters, vacancy has fallen most sharply in three of the four large Texas markets: Austin, Houston and San Antonio. Vacancy increased most sharply in Palm Beach, Omaha and San Diego during this period.
Although just 21 markets posted lower first-quarter vacancy rates, 46 of the 50 markets saw rental rates increase. Over the past four quarters, asking rates for Class A space have spiked 25 percent in both New York and Austin, followed by San Jose, Boston and San Francisco, all with year-over-year gains above 20 percent, according to Grubb & Ellis. At the other extreme, Class A rates fell 5 percent in Detroit.
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