U.S. Office Fundamentals Remain Solid Despite a Modest Start to 2019
As highlighted in Colliers’ Q1 2019 U.S. Office Market Outlook Report, even though the U.S. office market had a quiet start to 2019, occupancy remains at a record high. Rents have surpassed previous cyclical peaks in several markets. Although net absorption and sales volume were down, this is common for most first quarters. The amount of office space under construction is at its highest-ever level.
- Vacancy remains tight: U.S. office vacancy held firm in Q1 2019 and remains at a record low.
- Rents rise on premium space: Average asking rents held steady in the first quarter but some central business district (CBD) markets are recording new rental highs on the best space, while suburban rates saw a marginal fall.
- Absorption falls: Net absorption fell sharply in Q1 2019 in CBD markets but with suburban markets overall registering moderately strong gains.
- Construction reaches a new high: Office construction rose again in the first quarter and has surpassed the peak of the prior cycle.
- Sales volume is down: Office sales volume is down year over year. This has yet to impact cap rates and pricing, which are holding firm.
For more details on the latest office trends, download the Q1 2019 U.S. Office Market Outlook. Be sure to also explore the Q1 2019 update to Your Market Insights Hub | U.S. Office, which presents the latest data and forecasts in a detailed, interactive format — including a new metro map feature.