Demand for U.S. office space highest since 2006
The weak has become strong. Office space, one of the slowest property types to recover from the economic crisis, is finally running hot. U.S. businesses absorbed 21.4 million square feet of office space during 2014, the most aggressive expansion in eight years. That strengthening demand has boosted lease rates by 70 percent.
The statistics, compiled by DTZ, show that 2014 ended strong with 61 of the 80 markets the company tracks reporting fourth-quarter occupancy gains. Kevin Thorpe, chief economist at DTZ, says the office sector was emboldened by U.S. job growth.
“If one annualizes the second half of 2014, the office sector has been absorbing space at nearly twice its historical average,” Thorpe notes. “Economic fundamentals are increasingly compelling for developers to move forward with new projects.”
Regionally, fourth quarter net absorption in the West increased by 89 percent year-over-year; the South was up 36 percent during the period