Jul
06

Nationally, Office Demand is up Considerably

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up_Graph_600x338In keeping with generally stronger labor markets, June’s disappointing job numbers notwithstanding, tenant demand for office space muscled up during the second quarter, DTZ said Thursday. That in turn led to the best year-over-year increase in asking rents since the peak of the last cycle.

Office markets across the US absorbed an aggregate of 20.1 million square feet of space during Q2, up 15.3% from the year-ago period. Sixty-eight of the 80 metro areas tracked by DTZ reported occupancy gains during Q2, while 12 withstood losses. Vacancy declined 20 basis points to 14.2% from the previous quarter.

“Net absorption is solid and picking up steam, which links directly to office-using job growth and is the strongest it has been in the current cycle,” says chief economist Kevin Thorpe. Looking at the past four quarters, tenant growth is approaching an annualized 80 million square feet, “which puts us back in pre-recession territory.”

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