According to CoStar Portfolio Strategy analysts recapping the office market’s past year performance, demand for office space is expected to remain at post-recession highs for the next two years. With vacancies falling and rents rising in growing numbers of submarkets and slices within the U.S. office sector. Over the next two years, CoStar expects annual absorption to be very similar to 2014, in the 90 million square foot range. As rents have increased across the board and vacancy numbers have continued to tighten, helping make the case for new development. Overall demand strength has given owners the confidence to raise rental rates. Construction continues to stay in check in most metros.
Excerpts from the Article:
With vacancies falling and rents rising in growing numbers of submarkets and slices within the U.S. office sector, demand for office space is expected to remain at post-recession highs for the next two years, according to CoStar Portfolio Strategy analysts recapping the office market’s past year performance. “2014 was a great year for the office market,” said Walter Page, director of office research, during CoStar’s State of The U.S. Office Market 2014 Review and Forecast. “The keystone mark is that net absorption was up 42% from a year earlier. The fourth quarter in particular was very strong, with over 30 million square feet of net absorption.”Citation and link:
Drummer, Randal. “On a roll U.S. office market demand expect to stay strong through 2016.” CoStar News., 28 Jan. 2015 Web. 30 Jan. 2015.