Commercial real estate professionals can be forgiven if they lack optimism regarding the country’s current economic recovery. Things have gotten better, it’s true. But they’re certainly not getting better fast enough to make anyone truly happy.
This reality is reflected in the first quarter 2012 U.S. office sector report recently released by Cassidy Turley. According to the report, office sector fundamentals are improving consistently. But this improvement is far from robust.
Consider this: In the first quarter of the year, Cassidy Turley reported that U.S. office vacancy rates fell to 15.9 percent. But that fall represented just 10 basis points from the fourth quarter of 2011.
You can forgive commercial real estate pros for not being overly excited. After all, the office vacancy rate has only improved by a total of 120 basis points from the recessionary peak it saw in the middle of 2010.
Still, even with this slow rate of improvement, the country has seen nearly 83 million square feet of empty office space leased, according to the Cassidy Turley report. At the same time, U.S. office rents have been steadily rising every quarter since the third in 2010. Today, the average asking rent in the office sector is $21.60 a square foot.
That’s not great, of course. But it’s better. And today, that’s about all that you can expect.