A resurgence of large, single-asset transactions pushed U.S. office investment volume up to $93.1 billion for the year so far, according to JLL research. Overall leasing activity is in line with recent quarters, but tenants’ flight to quality has accelerated in 2018, leading to increased office availabilities in class B and C assets. National vacancy has increased 40 basis points in 2018 and is anticipated to increase further as the supply-demand dynamic continues to shift.
Other trends impacting the U.S. office sector include:
- Coworking is growing rapidly, with leasing activity showing no slow down during the third quarter.
- Transaction volume in primary CBDs bolstered gateway market volume and saw a 3.5 percent increase year-over-year, while secondary markets lagged in their share of acquisitions as compared to last year.
- Thinning buyer pools and a narrowing definition of core product led to an 8.4 percent year-over-year decline in investment volume in secondary office markets.
- While offshore investment declined, Canadian investment remains strong.
- Institutional investment remained steady, growing by 0.7 percent in the third quarter and posting 15.3 percent growth in primary markets.
For a detailed analysis on these key insights, read the latest U.S. Office Investment Quick Look.
