Slowdown in U.S. office sector forecast in 2017
The U.S. office sector is poised for a moderate slowdown in 2017, due to a combination of softer tenant demand and an increase in new supply, according to CBRE Research. Firms are finding it increasingly difficult to find qualified workers, which is reflected in the low unemployment rate; the near-record number of job openings; a steady increase in the number of “quits,” an indicator of worker confidence; and the real wage growth.
CBRE expects 2017 to register a lower net gain in office-using jobs at 273,400, down from 2016’s anticipated 413,600 and the 2010–2016 annual average of 418,100.
In addition, CBRE expects more than 50 million square feet of office space completions in 2017 — the most since 2009. Rents may increase by about 1.5 percent over the year, continuing to slow from 2014–2015 rates of 4.0 percent to 4.5 percent, the current cycle’s fastest growth.
The suburban office market probably will outperform in 2017, although this will vary