Office landlords can't help but smile. The national vacancy rate has declined for 11 straight quarters, registering 13.1% at the end of March. Manhattan-based real estate research firm Reis also reports that average asking rents have been trending upwards, rising from $25.06 to $26.70 per sq. ft. over the 12-month period ending in March.
The healthy state of the market is a stark contrast from the 18.3% vacancy rate recorded in June 2003, when the office sector bottomed out. But after a long successful run, Reis chief economist Dr. Sam Chandan believes that office market momentum is starting to weaken.
“There are definitely some warning signs for office fundamentals,” says Chandan. “Slower job growth in particular is already translating into weaker net absorption, and the big rent gains are concentrated in just a few markets,” he says. Monthly job growth in the U.S. averaged 129,000 during the first four months of this year, down from an average of 189,000 during the same period in 2006.
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source: nreionline.com
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