DALLAS, Nov. 7, 2017 — A strong U.S. economy continues to limit the supply of available office space across the country, with the largest number of vacancies in Sunbelt and Midwestern regions, according to BBG, a leading independent national commercial real estate valuation, advisory and assessment firm.
U.S. office vacancies fell to 12.9 percent, or 10 basis points, in the third quarter of 2017, according to industry sources. Suburban office market posted the biggest drop during this period, falling to 14.1 percent, or 20 basis points. Office space in downtown areas dropped to 10.6 percent, or 10 basis points.
BBG is one of the many companies actively seeking office space to accommodate growth. To meet increasing demand for its services, BBG has opened new offices and expanded or renewed lease agreements at existing offices in more than a dozen cities, both large and mid-sized, in every region of the country.
A healthy job market, a booming technology sector in a growing number of states, and a generally resilient economy are viewed as the primary reasons for the current trend in the office space market. More companies are hiring workers to accommodate increased business, forcing employers to seek new office space or expand in existing locations.
The nation's unemployment rate fell to 4.1percent in October, the lowest since December 2000, a government report said. Total nonfarm payroll employment increased by 261,000 in October.
The biggest declines in office vacancies are reportedly in mid-sized cities, such as Las Vegas, Phoenix, Albuquerque, Memphis, Louisville, Detroit and Orlando.
A recent Urban Land institute's Center for Capital Markets and Real Estate report said vacancy/occupancy rates are expected to remain relatively stable for offices and other areas in commercial real estate over the next few years.
BBG CEO Chris Roach commented: “The office leasing market remains one of the most vibrant areas in the commercial real estate market, with tenant leasing volume rising to one of its highest levels in the past two years. While the pace of activity may slow due to more supply of office space being made available, we do not anticipate a reversal in the current trend in the foreseeable future.”
BBG is a leading independent national commercial real-estate valuation, advisory and assessment firm headquartered in Dallas with 25 offices in key U.S. markets. BBG has achieved a reputation for personal attention, on-time delivery and deep expertise in multi-family, office, retail and industrial sectors. For more information about BBG, please visit www.bbgres.com.
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