CoStar data shows that several of the 54 largest U.S. office markets posted negative net absorption in the first quarter, which is the one area that CRE analysts will be tracking carefully in coming months. According to the group, the first three months of 2015 provided another 'feel good' quarter for the U.S. office market as office rent growth and elevated leasing and development activity continued to reflect strong fundamentals as brisk business activity and growing confidence in the broader economy encouraged business to lease space and investors to acquire office buildings. An excerpt from their reporting follows:
"While we still expect healthy overall growth in both 2015 and 2016, we view the office market as returning to a balance between supply and demand and also between tenant and landlord strength," said Walter Page, CoStar Group, Inc. Director of U.S. Research, Office.
CoStar analysts expected a slow down in net absorption during the first quarter after the strong 33 million square feet of net absorption in fourth-quarter 2014. However, the lower-than-expected level of absorption for first-quarter 2015 is somewhat concerning, especially because the slowdown appeared to impact other property types, Page said.
Net absorption fell below the net rate of new office building completions for the first time in five years during the first quarter. The narrow spread between newly delivered supply and occupancy demand resulted in a flattened vacancy rate of roughly 11.3% in the quarter in CoStar Portfolio Strategy's national index of the 54 largest U.S. metros.
For more news and information visit Blumberg Partners.
No comments:
Post a Comment