Saturation nation? Developers to add 68M sf of office inventory in US: report

The deliveries will be the greatest increase of office market since 2008

(Credit: iStock)
(Credit: iStock)

The U.S. office market could turn to slosh in 2019, as developers were expected to add 68 million square feet of space this year — the highest increase since 2008.

The massive development could lead to downward pressure on the country’s office rent growth, the Wall Street Journal reported. Citing a Cushman & Wakefield report, the Journal reported office rents have been rising across the U.S. for the past several years. From January through September, that reached an average of $30.95 a square foot, an increase of 2.1 percent compared to the same period in 2017.

“We are moving into greater opportunities for tenants,” Revathi Greenwood, Americas head of research for Cushman & Wakefield, told the Journal. Greenwood added that the vacancy rate is expect to rise to 13.7 percent in 2019 from 13.3 this year.

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In Chicago, through the third quarter, downtown office rents stayed flat and absorption slowed, potentially signaling a better environment for tenants.

The new forecast could also temper expectations for Manhattan office condo sales, which has seen a 23 percent price growth over the five-year average to $934 a square foot.  [WSJ] — David Jeans