US Office: Demand Keeps Outpacing Supply
CALABASAS, CA—Among office markets driven by the tech sector, San Jose has been a winner in both vacancy declines and rent growth; Marcus & Millichap reports that Silicon Valley’s peers have seen more variable results.
The US office sector at midyear is poised for continued growth, Marcus & Millichap says in a new report. Thanks to ongoing expansion in a number of office-using employment sectors as well as a slower pace of new deliveries, the national vacancy rate is expected to keep ticking downward while rent growth is expected to average 3.9% for the year—and considerably more in tech hubs.
The report notes that office-using employment recovered early following the downturn and is now up by 1.8 million workers over the pre-recession peak. While professional and business services remains the largest office-using employment sector, Marcus & Millichap sees an incremental lift in demand coming from other industries.