Brisk Job Growth Spurs U.S. Office Market Demand—Yardi Matrix Reports
Development pipeline remains robust even as construction delays slow deliveries
SANTA BARBARA, Calif., March 7, 2019 – A new report from Yardi® Matrix shows that the U.S. office market is continuing its strong performance into 2019. Asking rents rose by 0.5% in the three months ending in January.
The report, drawn from the Yardi Matrix office market database, illustrates that job growth in office-using industries, which measured 2% year-over-year in January, is driving demand for space. Inventory growth is strongest in coastal markets such as New York City and San Francisco and in rapidly growing metros like Austin, Texas; Nashville, Tenn.; and Charlotte, N.C. Office space under construction in February totaled more than 169 million square feet, 2.9% of existing inventory.
While the development pipeline remains healthy and projects in the planning phase represent a 6.7% addition to inventory, “office deliveries have been slowed by construction delays as a result of labor shortages,” the report says. Thanks to continuing demand and ample capital, however, “many of the [commercial real estate] projects in planning phases will move forward even if they are not delivered for a few years.”
Read the full Yardi Matrix national office report for February 2019.
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