US office vacancy rate falls in fourth quarter

04 Jan, 2017 10:07 am

US office vacancy rate declined in the fourth quarter to the lowest level since the second quarter of 2009, according to real estate research firm Reis Inc.

The national vacancy rate declined in the fourth quarter to 15.7 percent from 15.9 percent in the preceding quarter, Reis said in a report. However, asking and effective rents growth decelerated in the quarter from the third.

Asking rent grew by 0.3 percent, while effective rent rose by 0.4 percent in the most recent quarter, according to the report. Asking and effective rents had risen 0.4 percent in the third quarter. “… over time as demand continues to exceed new construction, vacancy should decline and rent growth will likely pick up as a result,” said Barbara Denham, senior economist at Reis.

Construction activity rose from the third quarter, with 8.53 million square feet of new office construction completed during the quarter. The recent employment growth should pull the vacancy rate down further in 2017, while rent growth should accelerate back towards a 3 percent annual growth rate, the firm said. -Reuters

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