US Office Market Forecast May 2009
The office vacancy rate is expected to increase in 2009 by 2.7 percentage points, from 13.4% to 16.1% and by 4.3 percentage points in 2010, from 16.1% to 20.4%. The decrease in the national occupancy rate in 2009 and 2010 will be driven by large negative absorption of office space, as 82 million and 115 million square feet are expected to be vacated, respectively, during these two years.
The NAR/TWR May 2009 office market forecast does not spell a healthy picture for the US office market in 2010, which, as indicated, will be marked by very high negative absorption and a 20% vacancy rate. However, it should be noted that office market behavior in many local markets is likely to deviate significantly from average national performance. Commercial property investors need to evaluate carefully the vacancy and rent prospects of the local markets they are targeting, in order to determine the best entry time that will maximize their profits from the anticipated office market recovery.
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