According to a new report from private real estate firm Transwestern, cautious development and healthy absorption across major US office markets have contributed to a substantial decline in vacancy, which hit a ten-year low in December of 2017.

Transwestern’s 2017 year-end report on the national office market shows that December’s vacancy rate dropped to as little as 11.5%, fuelled by significant net absorption in markets such as Dallas/Fort Worth; San Jose/Silicon Valley; Seattle; Northern Virginia; and Austin, Texas.

Ryan Tharp, Director of Research for Transwestern’s Dallas office, noted that while Dallas led absorption in 2017 with nearly 5.3 million sq. ft., the majority of major markets contributed to this consistent downward trend. 

“Miami, for example, posted a 10-year low in overall vacancy during 2017 with an average 150,000 square feet of positive absorption each quarter,” said Tharp. “The strength of the office market is not confined to a few specific metros or regions.”

Strong rent growth also was experienced around the country in the fourth quarter of 2017, with the top 10 markets in this category - representing Eastern, Central, and Western regions of the country - experiencing increases between 5% and 9%. 

Boston led the nation in rent growth for the quarter at a figure of 15.1%. Overall, the average asking office rental rate for US office product ended the year at $25.51 per sq. ft., reflecting an annual growth of 3.4%.

Confidence in the market’s performance through 2018 also remains high, boosted further by recent tax cuts.

Elizabeth Norton, Managing Director of Research based in Washington, D.C., said of the current market and its outlook for 2018, “Despite Northern Virginia having the second-highest office vacancy in the country at 16.8%, we believe consumer and business spending will strengthen in 2018, further bolstering both the local and national office market as companies grow to keep up with demand for goods and services.”

Sam Bonson

Sam is an aspiring novelist with a passion for fantasy and crime thrillers. He is currently working as a content writer, journalist & editor as he continues to expand his horizons.
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