First-half figures illustrate rising demand, employment, construction and sales
SANTA BARBARA, Calif., August 7, 2019 – Strong demand for U.S. office space and “a supply pipeline that shows no sign of slowing down” is boosting average asking rents and lowering vacancy rates, according to a new report from Yardi® Matrix.
Average asking rates increased 1.7% over the six-month period ending in June 2019, matching office-using employment sectors’ year-over-year growth rate that month. The national vacancy rate was 13.5% in June, 20 basis points below the previous month.
The report documents 26.5 million square feet of office space delivered year-to-date and 174.7 million square feet currently under construction. Office sales totaled $38.8 billion through June and “the decline of the 10-year Treasury yield … should continue to act as a catalyst for transactions,” the report says.
Half of all space under construction is in six top gateway markets—Manhattan, N.Y., San Francisco, Washington, D.C., Boston, Los Angeles and Chicago—and growing tech markets Seattle, the Bay Area and Austin, Texas.
More information about U.S. office property demand, deliveries, lease rates, construction and sales is available in the national office report for July 2019.
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