It’s not booming like the industrial or apartment markets, but the U.S. office market enjoyed a healthy second quarter of the year, according to the latest research from Cushman & Wakefield.
Cushman & Wakefield reported that office markets across the country saw steady leasing volumes, strong absorption and rising asking rents.
In little surprise, the technology and financial services sectors ranked first when it came to office leasing in the first half of the year. Cushman reported that technology companies accounted for about 23 percent of all office leasing activity, while financial services represented about 17 percent of activity.
The office sector saw a total of 18 million square feet of new construction in the second quarter, the highest this number has been in nearly 10 years. This volume is also a solid increase from the first quarter of the year, when 10.8 million square feet of new office space was delivered.
Cushman reported that the amount of office space under construction jumped to 107.2 million square feet, up from 105.1 million square feet at the end of the first quarter.
Average office asking rents jumped 1 percent in the second quarter when compared to the first, rising to a record $30.94 nationally. Nearly two-thirds of the office markets tracked by Cushman & Wakefield saw office rent increases in the second quarter of the year.
“Office markets throughout the country are benefitting from a strong economy, as robust job growth drives demand for space,” said Revathi Greenwood, head of Americas research at Cushman & Wakefield, in a written statement. “The supply of new buildings is rising rapidly, to the highest levels we’ve seen over the last decade.”
The increase in new buldings did push up office vacancy rates in the second quarter. Cushman said that the national office vacancy rate hit 13.4 percent, up from 13.3 percent in the first quarter of the year. New leasing activity totaled 72 million square feet in the second quarter, bringing the total for the first half to 144.6 million square feet.