Us office market sees strongest quarter in six years

Photo: Michael Tapp

Approximately 40 million square feet of positive net absorption was recorded for the year – a notable increase over the 28.2 million square feet of occupancy gains across the national office market in 2012. Indeed, the last three months of 2013 marked the 15th consecutive quarter of positive net absorption, as the commercial property market's recovery broadens out.

"These findings show a cohesive, across-the-board tightening in fundamentals, an uptick in overall activity and broadening recovery," said John Sikaitis, Managing Director Local Markets and Office Research with Jones Lang Lasalle.

Jones Lang Lasalle's report shows vacancy rates during the past 12 months dropped by 40 basis points to 16.6 percent – the lowest rate in five years.  Overall, the Central Business Districts faired better than their suburban counterparts with a 13.9 percent vacancy rate at the end of 2013 compared to 18.2 percent in the suburbs.  While still high, the suburban vacancy rate is down a noteworthy 140 basis points from 2012 levels.

"After five years of recovery defined by geographic and industry segmentation, increased leasing, touring and absorption helped supply and demand metrics align for the overall national office market in 2013," added Sikaitis.