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.
Yardi Matrix offers the industry’s most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. Yardi Matrix covers multifamily, student housing, industrial, office and self storage property types. Email [email protected], call (480) 663-1149 or visit yardimatrix.com to learn more.
Yardi® develops and supports industry-leading investment and property management software for all types and sizes of real estate companies. Established in 1984, Yardi is based in Santa Barbara, Calif., and serves clients worldwide. For more information on how Yardi is Energized for Tomorrow, visit yardi.com.