Year-end results proved that economic expansion has reached a tipping point in many markets across the U.S, pushing rental rates to pre-recession levels. Activity is now spreading beyond West and Northeast into Sun Belt markets on the heels of demographic, financial and professional business services growth.
What other trends have we seen and what do they mean for 2016?
- The U.S. economy continued to expand in 2015 through both employment and output, despite global economic uncertainty.
- For office tenants across the country, 2015 was a year of growth as nearly 50% of leasing activity presented company expansion. This is expected to continue through this year.
- CBDs remain the prime location for many tenants, but with 63.3% rent premium, suburbs are starting to pick up.
- Total vacancy declined to its lowest level in eight years, even with the addition of more than 44.2 million square feet of new supply across county.
- 2016 = BIG NUMBERS. Market are preparing to deliver 48.9 million square feet of new supply, putting upward pressure on rental rates while providing large tenants with much needed supply to support expansion.
What does all this mean for the economy? Get the whole story in our complete Q4 2015 Office Outlook.