FILE PHOTO: A taxicab enters the financial district security zone near the New York Stock Exchange (NYSE) in New York City, U.S., March 23, 2017. REUTERS/Brendan McDermid
July 2, 2019
(Reuters) – U.S. office vacancy rate rose by 0.2% to 16.8% in the second quarter from a year earlier, according to real estate research firm Reis Inc, amid a slowing U.S. economy and ongoing trade tensions with China.
Vacancy increased in 43 of 79 metros in the quarter, higher than most quarters, Reis said.
“Despite a healthy job market and strong overall economy, the office market has moved – and continues to move – at a sluggish pace,” the report said.
New construction of office spaces declined to 7.1 million square feet from 11.2 million square feet.
Construction has been well below levels recorded in previous years, with the second quarter seeing the lowest number of new construction since the first quarter of 2015, the report added.
“With vacancies hovering at just 100 basis points below the sector’s cyclical peak of 17.6% in 2010, there is very little to prompt developers to build,” Reis said.
Net absorption, measured in terms of available office space sold in the market during a certain time period, rose slightly higher to 3.2 million square feet of office space in the quarter, compared with 2.9 million square feet a year earlier.
Both average asking and effective rents rose about 2.2% from a year-ago quarter.
(Reporting by Ashwini Raj; Editing by Shailesh Kuber)
