Industry heads into 2020 with solid supply and demand metrics
SANTA BARBARA, Calif., Jan. 22, 2020 – U.S. office asking rates, employment and deliveries all rose as 2019 neared conclusion, according to a new report from Yardi® Matrix.
The average asking rate increased 2.3% year-over-year in November, led by double-digit growth in Tampa, Fla., San Francisco and New York City boroughs Brooklyn and Manhattan. Office-using employment increased 1.6% year-over-year in the 12 months ending in October. Deliveries for the year through November totaled 67 million square feet of space; another 156 million square feet remained under construction. Deliveries have increased every year since 2011.
The 13.6% national vacancy rate in November represented a 10-basis-point decrease from October.
The report shows that demand for office space as measured by office-using employment remains strong although job creation is heavily concentrated in a handful of metros. From October 2018 through October 2019, the top 20 markets tracked by Yardi Matrix accounted for 64% of new office-using jobs but only about 42% of overall employment growth. Similarly, nearly 77% of new stock under construction is located in 20 metros.
Year-to-date transactions through November totaled $82.2 billion. “We expect this number to come close to matching or exceeding 2018’s volume of $93 billion once fourth-quarter transactions are completed and collected by our research team,” the report says.
Learn more about supply, demand and transactions, including in-depth looks at Brooklyn, Nashville, Tenn., and Orlando, Fla., in the Yardi Matrix national office report for December 2019.
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