As economy continues growing investor’s capital moves further out on risk betting that office tenants are ready to expand. Office demand in San Francisco, Houston and Denver experiencing rapid growth for tech and energy hotspots while in Manhattan and Washington DC remained rather uneven. According to Director of Office Research Walter Page with Costar Portfolio Strategy, total U.S. office net absorption is projected to enjoy sturdy 21% growth in 2015 to 95 million square feet. The office market are expected to growth in the area with primary tech-driven such as Silicon Valley, where we continue to see the job growth, with the interest rates staying low and the stock market high.
Excerpts from the Article:While demand for apartments remained strong across most markets in 2014, office demand remained rather spotty, with traditional office strongholds such as Manhattan and Washington DC struggling while tech and energy hotspots such as San Francisco, Houston and Denver experiencing explosive growth in the office sector. Total U.S. office net absorption is projected to enjoy robust 21% growth in 2015 to 95 million square feet, according to Director of Office Research Walter Page with CoStar Portfolio Strategy. And because new supply is still well below historical levels and growing at just half the rate of demand, office vacancy rates continue to slowly decline and are expected to gradually dip toward a low of around 11% in late 2016. As vacancy has declined, rent growth has picked up, rising at a respectable 3.6% annual rate in the third quarter, versus 2.6% for the same period one year earlier. Citation and link:
Drummer, Randyl. “OFFICE OUTLOOK: Will 2015 Be the Year Demand Shifts Into Higher Gear?.” CoStar News., 30 Dec. 2014 Web. 05 Jan. 2015.