Bullish job market drives asking rents up; 10-year Treasury rate drop could spur sales
SANTA BARBARA, Calif., June 27, 2019 – U.S. office properties, riding an ongoing strong job market, saw asking rents rise 0.4% in May 2019 over the previous three-month period, according to a new national report from Yardi® Matrix.
The report notes that although 173 million square feet of office space is under construction, the pipeline is mostly concentrated in metros that have growing space needs or a strong demand for newer product with updated technology and amenities. Brooklyn, N.Y., Nashville, Tenn., and Austin, Texas, have the most space under construction as a percentage of existing stock, while Manhattan, N.Y., has 20.8 million square feet—more than twice as much as any other metro. The national occupancy rate held steady at 13.7% in May.
Year-to-date sales totaling $28.5 billion through May were “weak compared to recent years, but activity could pick up as capital markets begin to settle down,” the report says; meanwhile, “institutional capital continues to pour into the industry” and the recent drop in the 10-year U.S. Treasury rate could boost sales.
View the full Yardi Matrix national office report for June 2019.
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