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US Office Markets See Drops in Vacancies and Rises in Demand During Q2 2016


US Office Markets See Drops in Vacancies and Rises in Demand During Q2 2016


NAI Global’s Quarterly Office Market Report Analyzes Top 21 US Markets


New York – September 7, 2016– NAI Global, a leading global commercial real estate brokerage firm, today released a series of office market reports for Q2 2016 that analyzes the top 21 markets in the US.  These reports reveal that the US office sector continues to show pockets of growth and a steady appetite for office market property. 


Net absorption rates in the office sector improved across most of the major US commercial real estate markets, with 16 of 21 major markets showing increases, which is up from three markets in Q1 2016.  Eighteen of the 21 markets analyzed saw drops in vacancy and six of those markets (Baltimore, Kansas City, Minneapolis, New York City, Philadelphia and Sacramento) showed an increase in construction, indicating that demand may be greater than supply in those markets.  Houston, San Diego and San Francisco were the only three markets to see increases in vacancy. Houston and San Diego were also the only two cities to report negative absorption, while also posting an increase in vacancy. San Francisco was the only market where net absorption decreased -- although still positive -- that also saw a rise in vacancy.   


Rental rates increased in 16 of 21 markets measured, while five markets (Boston, Chicago, Houston, Seattle/Puget Sound and St. Louis) reported dips in their average rental asking rates.  This compares to 14 top markets increasing rates in Q1 2016.   


“The landscape for commercial real estate in the US office sector continues to grow and present investors with interesting opportunities,” said Jay Olshonsky, FRICS, SIOR, President of NAI Global.  “With net absorption and rental rates increasing, coupled with vacancies trending downward in the majority of the largest US markets, it is evident that the current environment for the commercial real estate US office sector is heathy and remains poised for continuous growth.”


Ten markets saw an increase in office construction in Q2 2016, which is similar to the eight markets that showed an increase of construction at the end of Q1 2016, indicating steady and consistent growth.   Dallas/Fort Worth, Houston, New York City, and San Francisco reported the largest amount of completed construction in Q2 with a total of 6,249,234 sq. ft. delivered.  Dallas/Fort Worth, New York City, Seattle/Puget Sound and Washington, D.C. reported the largest amount of ongoing construction with a total of 42,024,456 sq. ft.


“While we saw mixed data in the first quarter of 2016, strong second quarter statistics illustrate that the supply and demand dynamic continues to drive growth and create opportunity across major US markets,” Olshonsky added.  


For a copy of the report, please click here



Maureen Richardson, River Communications



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NAI Global is one of the most powerful global commercial real estate brokerage firms. NAI Global offices are leaders in their local markets and work in unison to provide clients with exceptional solutions to their commercial real estate needs. NAI Global has more than 375 offices strategically located throughout North America, Latin America, Europe and Asia Pacific, with over 6,700 local market professionals, managing over 380 million square feet of property.  Annually, NAI Global completes in excess of $20 billion in commercial real estate transactions throughout the world.

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