Office Markets Continue to Tighten – Cushman & Wakefield

Global real estate giant Cushman & Wakefield released its 3rd Quarter Office Market Beat. Among the report’s findings:

  • National Vacancy Rate:  Office vacancy rate is 13.2%, down from 13.3% in Q2. This is the lowest national vacancy rate since 2008.
  • National Asking Rate:  $29.45
  • New Office Space:  A total of 11.3 MSF of new office space was delivered to markets across the U.S. during the third quarter of 2016, slightly less than the pace of absorption.
  • National Rent Change:  Weighted average asking rent increased by 1.4% from Q2 2016 and rose 5.5% from Q3 2015.

Most Expensive Markets per Sqft.:
1.)  Midtown Manhattan, NY:  $79.91
2.)  Midtown South, NY:  $70.29
3.)  San Francisco, CA:  $69.21
4.)  Downtown Manhattan, NY:  $59.13
5.)  San Mateo County, CA:  $56.55

Lowest Vacancy Rates
1.)  Nashville, TN:  4.7%
2.)  Midtown South Manhattan, NY:  6.7%
3.)  Charleston, SC:  7.0%
4.)  San Mateo, CA:  7.5%
5.)  San Francisco, CA:  7.7%

Highest Vacancy Rates
1.)  Westchester County, NY:  22.8%
2.)  Fairfield County, CT:  21.5%
3.)  Suburban Virginia:  21.1%
4.)  Suburban Marland:  21.2%

C&W Conclusion:  “National trends are looking more likely to show that rental growth rates will peak in 2016 and then begin decelerating in 2017.”