Tech sector propels Q2 net absorption and rent growth for U.S. office sector

U.S. office markets reported net absorption of 6.5 million square feet in the second quarter, as demand moderated, though rents increased slightly, according to Cushman & Wakefield.

Demand continued to rise in the second quarter, but the 6.5 million square feet absorbed was a slowdown from the previous quarter’s 10.2 million square feet of absorption. It represented the least amount of space absorbed since the second quarter of 2012.

“U.S. office markets were driven by two major factors in the second quarter of 2019 — continuing growth in the technology sector and a rising volume of new construction deliveries,” said Revathi Greenwood, Cushman & Wakefield Americas head of research. “The technology sector’s growth offset softness elsewhere and kept absorption of space positive, albeit at a more modest pace than in previous quarters.”

On balance, U.S. absorption was positive because of strong performances in the Northern California markets, w