February 24th, 2016
Bolstered by a robust economic performance, the office market in Washington DC delivered a fine performance throughout 2015. Unemployment levels in the DC metropolitan area were at their lowest since 2008, reaching figures well below the US national average (4.3 per cent vs 5 per cent). These conditions have helped shape a real estate market that is predominantly favourable to landlords, as the following trends demonstrate:
Rental values continued their slow recovery throughout 2015 and are currently set around the $50 / square foot mark.
Availability rates for all types of office space went down to 16.3 per cent. Towards the end of 2015, approximately 13.2 million square feet of office space were vacant.
The most significant transactions involved lease renewals or re-lets, although there have been several large sale transactions taking place in the city’s East End too.
Annual absorption levels were high at 887,000 square feet, and construction activity increased by 22 per cent on a year-on-year basis.
However, here has modest decrease in vacancy rates, especially as far as Class A space is concerned. Vacancy rates for these types of office properties still remain relatively high at 11.5 per cent. Vacancy levels for Class B and Class C space in Washington were slightly lower at 10 per cent.
Washington DC Office Market: 2015 Key Facts & Figures
During 2015, vacancy rates for all types of office space in Washington went down to 10.5 per cent, pretty much in line with the city’s historical average of 10.7 per cent. At the same time, net absorption levels increased by a staggering 185 per cent, going from 198,000 square feet in 2014 to 398,000 by December 2015. Nearly half of the transactions involved office stock in Washington’s CBD, which clearly outperformed all other sub-markets. This is attributed to the ongoing influx of new tenants relocating from secondary office locations into the CBD. This trend began to be evident in 2014 and has been solidified over the past 12 months. Read the rest of this entry »
February 17th, 2016
An in depth look at how the Manhattan office space market has fared in 2015 and forecasts for this coming year.
Manhattan Office Market Overview of 2015
Over the past 12 months, federal economic policy has been focusing on expansion, driving an increase in employment rates, especially as far as office-based employment is concerned. This type of employment grew by 2.6 per cent in just 1 year, and prompted a considerable increase in demand led by occupiers in the Manhattan financial services sector. In certain Manhattan sub-markets (such as in Midtown South), strong demand from tenants in the TAMI sector (technology, advertising, media, and information) was also evident.
At the end of 2015, total office stock in Manhattan was just under 395 million square feet, of which 28 million were vacant. Total transaction volume amounted to more than 28 million square feet, one of the highest figures of the past 10 years. However, there was a slight decline in transaction volumes in downtown Manhattan, where transactions mostly involved small and medium-sized office properties.
Manhattan Office Market: Key Facts & Figures
During 2015, office vacancy rates in Manhattan went down from 9.3 per cent to 8.5 per cent. This decrease equals to 90 basis points on a year-on-year basis, and brings vacancy rates closer to Manhattan’s historical average of 8.9 per cent. In Midtown South, vacancy rates were markedly lower at 6.2 per cent, whereas in downtown Manhattan they went down by 30 basis points to 9.4 per cent. Read the rest of this entry »