U.S. office market fundamentals steady in first quarter
Tenants exercised caution early in the year due to concern over economic strength, but fundamentals remain steady, according to JLL’s preliminary first quarter 2016 U.S. office research.
According to JLL’s United States Office First Look – Q1 2016, approximately 53.8 percent of tenants maintained their current real estate occupancy rather than expanding. Tenant expansion had made up nearly 50 percent of leasing activity during the past several quarters.
Other trends were occupancy growth in high-demand markets, rent acceleration ahead of supply relief and a slowing of expansionary leasing activity
Occupancy growth slowed in the first quarter following a high rate of net absorption at the end of 2015, but planned expansions will continue to push occupancy rates higher throughout the year. Net absorption was 7.7 million square feet in the first quarter.
Where tenant demand and talent migration is high, markets reporte