February 5, 2016
Oil inventories have ballooned 20-percent over 2014 supplies, causing a steep decline in the price of crude oil, according to a new report from Marcus & Millichap. Substantial supply increases is troubling for global financial markets, and raises concerns that the energy sector will drag down the U.S. economy.
The Calabasas-based firm reported office vacancies in the U.S. fell nationally to 14.9 percent as a result of growing demand, which pushed rent increases up 4 percent last year. Energy-sector cutbacks in spending and staffing appeared in markets with higher concentrations of oil-related workers, such as Houston and Oklahoma City.
Potential erosion of demand for warehouse space used for storing and distributing drilling equipment and supplies is a likely result of reduced activity in oil fields. Those declines could be offset by retailers and e-commerce tenants.