US Office Vacancy Rates Decline

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Office vacancy rates declined in 10 of the 13 largest markets in the U.S. in second, with Houston and Boston posting the largest drops, according to preliminary data released today by CBRE.

The vacancy rate for offices is now 12.0 percent in Houston, down from 12.5 percent, while 12.1 percent of the space in Boston is available, down from 12.6 percent.

The lowest vacancy rate of the top U.S. markets is found in New York, where 7.6 percent of space is empty, unchanged from the previous quarter. San Francisco is next with an 8.5 percent vacancy rate, down from 8.7 in the previous quarter.

Washington D.C. was the only major market to record an increase, rising to 14.4 percent, due to "decreased activity by the federal government."

"Continued job growth and minimal new office development is leading to tighter conditions in most major U.S. office markets," said Brook Scott, CBRE's interim head of research, Americas. "Stronger consumer confidence and a resurgent housing market are helping to strengthen industrial markets, but the sector still faces headwinds from a slowdown in economic activity outside the U.S."

Rental rates "continued to trend higher and concessions remained stable in most markets due to moderate job growth," the consultancy reports.