U.S. office sector set for strong 2014

With GDP growth in 2014 expected to exceed 3 percent for the first time since 2005, the U.S. office market will likely build on a strong 2013 and see office vacancies hit a six-year low, according to the 2014 National Office Report from Marcus & Millichap.

According to the report, four years without substantial new supply have eliminated the problems with excess space the U.S. office market has faced since the global financial crisis. That, coupled with 2.8 percent of expected office-using job growth in 2014, has led Marcus & Millichap to forecast a reduction in the national office vacancy rate of 120 basis points, bringing the national vacancy rate down to 14.8 percent and producing a 3.5 percent gain in asking rent prices. Furthermore, the report expects market conditions to push demand for office space in 2014 up to 135 million square feet — a significantly greater figure than the