SAN FRANCISCO--(BUSINESS WIRE)--The post-recession economic recovery has been spotty but trending upward; second quarter 2014 national office market data reflects this movement in the right direction, according to Cushman & Wakefield. The nation’s 44 major office markets are expanding, with vacancies falling, asking rents remaining stable and even increasing, and leasing activity and net absorption rising, according to Maria T. Sicola, Cushman & Wakefield’s head of research for the Americas.
“The nation’s economy has started to generate more jobs in 2014. That has resulted in greater demand for office space in the national marketplace,” Sicola said. “The biggest news is the overall national vacancy rate fell to its lowest level in five years.”
The central business district (CBD) vacancy rate fell to 12.7 percent, a decline of 70 basis points year-over-year, while the suburban vacancy rate fell by 60 basis points to 16.8 percent. Three of the lowest vacancy rates are in New York City: 8.2 percent in Midtown South, 10.0 percent in Downtown, and 11.0 percent in Midtown. Suburban office markets with the lowest vacancy rates include three in Northern California: non-CBD San Francisco (8.6 percent), San Francisco Peninsula (10.6 percent) and Silicon Valley (10.7 percent).
“Leasing activity is consistent with last year at 103.3 million square feet year-to-date compared to 104 million square feet one year ago,” Sicola said. “Overall, leasing in the nation’s CBD markets has improved by 18.2 percent compared to mid-year 2013. In contrast, suburban leasing activity fell by 10 percent year-over-year.”
Net absorption year-to-date totaled 10.5 million square feet in the nation’s CBDs and 10.3 million square feet in the suburbs. Notably, Manhattan alone contributed 5.4 million square feet in absorption – over 50 percent of the CBD total. Direct Class A asking rents in the CBDs has increased by 3.1 percent since mid-year 2013, averaging $47.39 per square foot. In the suburbs, rents increased as well, by 3.9 percent year-over-year to $29.51 per square foot.
Cushman & Wakefield Research for the Americas is recognized worldwide for the originality of its research and the value of its thought leadership. The team performs rigorous, property-oriented research and data-driven analysis on a global basis. Its professionals collect data from publicly available sources, owners, agents and – most importantly – from the firm’s brokers, appraisers and property managers.