Rising Employment Fuels Office Rent Growth, Yardi Matrix Reports
Professional and business services drive demand for space; new supply projected to top 2018’s total
SANTA BARBARA, Calif., March 26, 2019 – U.S. office rents are rising on strong demand and steady supply absorption, according to a new report from Yardi® Matrix.
The report, which compiles office market data collected by Yardi Matrix, identifies solid office employment growth as the principal driver of demand. Professional and business services comprise the fastest growing segment of the economy; office-using sectors added 642,000 jobs over the 12 months ending in February 2019. That produced a 0.7% national increase in asking rents over the last three months, led by tech-centric centers San Francisco, Silicon Valley, Boston and Austin, Texas, along with Philadelphia, Atlanta, Tampa, Fla., and Phoenix.
More than 171 million square feet of space was under construction as of February, representing inventory growth of 2.9%. Deliveries in 2019 should top 2018’s cycle peak of 70 million square feet, the report says.
Read the full Yardi Matrix national office report for March 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, 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.