Office buildings are filling up across the nation, and the Midwest, as vacancy rates in this sector continue to fall. And according to the latest research from CBRE, office vacancies are dropping especially fast in the Midwest cities of Detroit and Memphis.
In its third quarter office report, CBRE said that office vacancy rates in both Memphis and Detroit dropped by more than 80 basis points when compared to the same time last year.
Detroit and Memphis aren’t outliers, though. Office vacancy rates across the country fell in the third quarter, dropping to an average of 12.9 percent, according to CBRE’s research. And despite all the headlines about companies moving to the center of big cities, it’s suburban office markets that are seeing the steepest declines in vacancies.
The vacancy rate in suburban markets fell 20 basis points during the third quarter, according to CBRE, falling to 14.1 percent. Downtown vacancy rates fell 10 basis points to 10.6 percent. The national office vacancy rate is now near its post-recession low.
“The slow, steady improvement in the office market continued in the third quarter after a second quarter pause. Demand remains positive but modest,” said Jeffrey Havsy, Americas’ chief economist for CBRE, in a statement.
The biggest metro-area falls in office vacancy rates were recorded by Trenton, New Jersey, which saw its office vacancy rate fall 220 basis points, and Las Vegas, where the office vacancy rate dipped by 140 basis points.
Havsy said that CBRE only expects office vacancy rates to continue to fall. He points to the continued growth in office-using jobs as the main reason.