Yardi Matrix Reports Steady Office Sector Performance
Employment growth sparked 80 million square feet of new supply in 2018. Other trends moderate demand
SANTA BARBARA, Calif., Jan. 29, 2019 – Data points that Yardi® Matrix collected on 6.8 billion square feet of office properties in 115 U.S. markets illustrate a healthy sector driven by growth among office-using industries.
A new national office report shows that rising demand, spearheaded by 286,000 new jobs in a variety of professional and technical services, led to about 80 million square feet of space coming online in 2018. Yardi Matrix anticipates a similar amount of new supply this year. About 157 million square feet of office space is under development, according to the report.
The report also notes that “demand is moderated by long-term trends such as the growing number of remote workers, smaller workspaces and more collaborative space,” including 43 million square feet of shared space leases. Office transaction volume totaled $81.9 billion in 2018, down from $89.1 billion in 2017, reflecting capital’s movement to the apartment and industrial sectors. Asking rents in December 2018 were 0.7% lower than in the previous quarter and the vacancy rate stood at 14%.
Read the full Yardi Matrix office report.
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