The US Office Vacancy Rate is Predicted to Rise to 17% in Q4 2009The increase in the US office vacancy rate will be driven by a decrease in demand and an increase in supply. In particular, office space demand, as measured by the occupied stock is expected to decrease by 18.6 million square feet in Q4 2009, bringing the predicted total decrease in demand for 2009 to 56.1 million square feet. Note that the decrease in demand in the third quarter of 2009 was more than three times smaller as the occupied stock declined by only 5.2 million square feet. On the supply side, the US office property stock is predicted to increase by 14 million square feet of new office space expected to be completed in the fourth quarter of 2009. This will represent a 14.2% decrease compared to the 16.3 million square feet that were completed in the third quarter of 2009. With deteriorating market fundamentals, office rents are predicted to decline by 1.9% in Q4 2009, contributing to a predicted annual drop of 12.1% for 2009. NAR/CBRE-EA predict that the US office property market will continue to deteriorate in 2010 with a 43.3 million square feet decrease in demand and a 25.5 million square feet increase in supply. As a result of these dynamics, the US office vacancy rate is predicted to climb to 18.3% and office rents to decrease by an additional 8.5% in 2010. If you have an interesting comment in relation to this article please use the form below Related Posts to submit it. Please read submission guidelines before writing and submitting your comment.
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