The office sector has lagged behind other commercial segments during the nation’s recovery from recession. But the latest data from Colliers International suggests that even this commercial sector is firmly in recovery mode.
And that can’t be considered anything but good news for commercial real estate professionals.
According to Colliers’ fourth quarter office report, the U.S. office vacancy rate dropped in the fourth quarter to 14.63 percent. This marks the fourth consecutive quarter in which this rate has fallen.
The North American office markets that Colliers tracks saw 21.1 million square feet of positive absorption during the last quarter of 2012. And for the entire year of 2012, total net absorption for the North American office market stood at 50.7 million square feet. As Colliers reports, that’s about the size of the entire office inventory of Ft. Lauderdale, Fla. It’s also the best yearly absorption in this sector since the 2008-2009 recession.
North America also saw $29.1 billion in office building sales in the fourth quarter of last year. And this seems to indicate a positive trend; the fourth quarter was the most lucrative one for the office sector in 2012.
Of course, not all segments of the office market are equally hot. Colliers reports that the “ICEE” — intellectual capital, energy and education — markets are capturing more than their fair share of North American office absorption. Last year, two-thirds of the 10 North American MSAs with the greatest absorption of office space were considered ICEE markets by Colliers.
Medical office transactions were also strong in 2012. Colliers said that this sector saw a gain of 30 percent in transaction activity in 2012 to $6.1 billion.
The best news? Colliers predicts that office will gain even more traction in 2013. This is partly because the housing market is also recovering. A strong housing market is an often overlooked, but important, driver for office space demand, Colliers reported.
