U.S. Office Vacancy Rates Continue to Rise at a Slower Pace
The ongoing rise in vacancy rates in the U.S. office, industrial, and retail markets continued to slow in the first quarter of 2010, according to the latest analysis from CBRE Econometric Advisors.
The ongoing rise in vacancy rates in the U.S. office, industrial, and retail markets continued to slow in the first quarter of 2010, according to the latest analysis from CBRE Econometric Advisors.
The office vacancy rate increased by 30 basis points (bps) to 16.6 percent at the end of the first quarter of 2010. While the increase did not improve over fourth quarter’s 20 basis point rise, the rate of increase is far better than the 70 bps increase of a year ago. Downtowns' increase of 40 bps doubled the suburbs' rise of 20 bps. Vacancy increases remain broad-based, however; in the first quarter, 38 of 57 markets experienced an increase.
Among markets whose vacancy rates declined this quarter, those with high-tech-oriented economies and more geographically-dispersed suburban employment patterns—such as Austin, Raleigh and San Jose—made noteworthy strides, says CBRE Econometric Advisors. Pittsburgh, which has outperformed throughout the recession and has a small but growing biotech and healthcare industry concentration, also declined by 70 bps and is boasting a 10.9 percent vacancy rate—its lowest in more than 10 years.
The national industrial availability rate increased 10 bps to 14.0 percent in the first quarter of 2010, marking the tenth consecutive quarter of rising availability. At the same time, the retail availability rate increased by 20 basis points, from 12.6 percent to 12.8 percent, and by 120 bps compared to a year ago. Signs continue to point toward peaking rates and the start of recovery within the year, says CBRE Econometric Advisors.
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