A strong U.S. economy continues to limit the supply of available office space across the…
A strong U.S. economy continues to limit the supply of available office space across the country, according to a report from commercial real estate valuation, advisory and assessment firm BBG.
U.S. office vacancies fell to 12.9 percent, or 10 basis points, in the third quarter of 2017, according to industry sources.
Suburban office market posted the biggest drop during this period, falling to 14.1 percent, or 20 basis points. Office space in downtown areas dropped to 10.6 percent, or 10 basis points.
A healthy job market, a booming technology sector in a growing number of states, and a generally resilient economy are viewed as the primary reasons for the current trend in the office space market.
More companies are hiring workers to accommodate increased business, forcing employers to seek new office space or expand in existing locations.
The nation’s unemployment rate fell to 4.1percent in October, the lowest since December 2000, a government report said. Total nonfarm payroll employment increased by 261,000 in October.
The biggest declines in office vacancies are reportedly in mid-sized cities, such as Las Vegas, Phoenix, Albuquerque, Memphis, Louisville, Detroit and Orlando.
A recent Urban Land institute’s Center for Capital Markets and Real Estate report said vacancy/occupancy rates are expected to remain relatively stable for offices and other areas in commercial real estate over the next few years.