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U.S. Office 

2016 Rental Growth: 1.4%
Q1 2017 ($31.63) / Q1 2016 ($31.18)

2017 Rental Growth Forecast:  2.7%
Q1 2018 ($32.49) / Q1 2017 ($31.63)

2015 Average Vacancy: 13.1%
2016 Average Vacancy: 12.9% (-1.53% vs 2015, year over year.)
2017 Average Vacancy Forecast: 12.9% (+0.0% vs 2016, year over year.)

• The national office vacancy rate increased 10 basis points (bps) in Q1 2017, to 13.0%, due to supply increase. The suburban and downtown rates increased by 10 bps each, to 14.2% and 10.7%, respectively.
• The overall rate’s four-quarter change is also a 10-bps decline.
• Over the past four quarters, tightening vacancy has been recorded predominantly in mid-sized markets, including Orlando, Richmond, Sacramento, Kansas City, Tucson, Riverside, St. Louis, Las Vegas and Detroit.

U.S. Industrial

2016 Rental Growth: 6.5%
Q1 2017 ($6.23) / Q1 2016 ($5.85)

2017 Rental Growth Forecast 4.49%
Q1 2018 ($6.51) / Q1 2017 ($6.23)

2015 Average Vacancy: 8.7%
2016 Average Vacancy: 7.9%, (-9.1% vs 2015, year over year. Vacancy has fallen 80 basis points.)
2017 Average Vacancy Forecast: 8.4% (+2.4% vs 2016, year over year.)

• The national industrial availability rate increased 6 bps in Q1 2017, to 8.0%. The increase reversed a 27-quarter trend of falling availability—the longest stretch on record.
• Expect to see greater parity between supply (completions) and demand (net absorption) in 2017. Upward pressure on rent levels will likely lessen.
• Thirty-eight markets recorded availability increases during Q1 2017, likely as a result of new space deliveries that were necessary to satisfy demand.