U.S. office leasing fell to the lowest level since 2012 and rents barely grew last year, adding to concerns over the market’s stability.
Net office absorption across the country fell to 21 million square feet in 2017, according to a report by research firm Reis, down from 29 million square feet in 2016.
The good news is that developers still aren’t building many new office towers nationwide, which should help keep the market stable, the Wall Street Journal reported. New construction added a mere 37.6 million square feet of new office supply in 2017, barely up from the 36.6 million added in 2016.
The average effective office rent, including concessions, grew by 1.8 percent in 2017, compared to 4 percent in 2015 and 12 percent in the year prior to the 2008 financial crisis.
New York City’s office market had a vacancy rate of 8.7 percent, according to Reis, the lowest in the country and almost half the national average of 16.3 percent. [WSJ] — Konrad Putzier