While vacant office spaces continue to fill up at a slow pace, limited new construction could be the real driving force behind the decreased vacancy rate, according to real estate services provider Cassidy Turley.
"It's still a tenant's market in most U.S. cities, meaning businesses still have leverage when negotiating for lower rents and attractive concession packages," Mr. Thorpe said. "But because of limited new supply, the pendulum is slowly shifting from a tenant's market to a landlord's market. Supply/demand fundamentals suggest the bulk of the country will be pushing office rents upward by this time next year."
There was 55.3 thousand square feet of office property under construction during the third quarter of this year, up from 54.5 thousand square feet in the previous quarter. Development of new office buildings is 30% below pre-recession levels.
Top 5 strongest markets in terms of demand for office space are:
- Houston, with 1.7 thousand square feet of net absorption
- New York City, with 1.3 thousand square feet
- Phoenix, with 822,000 square feet
- Atlanta, with 740,000 square feet
- Denver, with 668,000 square feet
To read the full report visit Cassidy Turley’s website.