March 11, 2019
A new report from Yardi Matrix shows that the U.S. office market is continuing its strong performance into 2019. Asking rents rose by 0.5% in the three months ending in January.
The report illustrates that job growth in office-using industries, which measured 2% year-over-year in January, is driving demand for space. Yardi Matrix writes inventory growth is strongest in coastal markets such as New York City and San Francisco, and in rapidly growing metros like Austin, TX; Nashville; and Charlotte, NC. Office space under construction in February totaled more than 169 million square feet, 2.9% of existing inventory.
While the development pipeline remains healthy and projects in the planning phase represent a 6.7% addition to inventory, Yardi Matrix notes “office deliveries have been slowed by construction delays as a result of labor shortages.” Thanks to continuing demand and ample capital, however, “many of the [commercial real estate] projects in planning phases will move forward even if they are not delivered for a few years,” says Yardi Matrix.
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