U.S. office building occupancy shows insubstantial growth

A microcosm of the national economic recovery as a whole, the U.S. office real estate market picked up 3.7 million more square feet of occupancy in the second quarter of 2011, which marked a fall back from the 5.5 million square feet gained in the first quarter. According to research by Reis, which studies 79 U.S. office markets, cited by the Wall Street Journal there’s still a gap of 126 million square feet of office space that needs to be filled to attain the total occupancy achieved in January 2008. “Relative to the overall inventory, it’s not a large amount,” said Ryan Severino, an economist at Reis. “We are generally trending in the right direction, even if it is a slower, more inconsistent recovery than market participants would like to see.” Not surprisingly, New York and Washington, D.C. are powering what little recovery the market has experienced. D.C. has the lowest office vacancy rate in the nation at 9 percent, and office rents are climbing in New York. Meanwhile vacancy rates in hard-hit Las Vegas and Phoenix remain at 24.9 and 26.5 percent, respectively. [WSJ]