The U.S. national office vacancy rate ended 2011 at 16 percent, with 65 of the 80 markets tracked registering positive net absorption. In 2010, only 43 markets recorded positive net absorption. Cassidy Turley’s 4Q11 office report indicates the technology-driven markets in the West were some of the strongest performers in 2011. San Jose-Silicon Valley led the country at 4.7 million square feet while San Francisco came in with 2.6 million square feet. Other markets that finished in the top 10 include New York City, Houston, Dallas, Austin, Philadelphia and the Washington, DC metro.
Other key highlights include:
- Vacancy has trended downwardsfor five consecutive quarters, but still remains 200 bps above its 20-year historical average of 14 percent.
- Office rents inched up seven cents in the fourth quarter of 2011 from the previous quarter to $21.50. Rents in the fourth quarter were up 0.8 percent from a year-ago. 2012 will be another year in which rents generally sit a low levels, with no real movement up or down.
- For the year (Jan. – Nov. 2011), office sales volumeis up 56 percent compared to 2010.
- National office cap rates inched up 10 bps in November compared to the previous month to 7.4 percent, but remain 150 bps below the peak of 8.9 percent in December of 2010. As of the report’s publication date, there were more than $11 billion in pending deals expected to close over the next three months.
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