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.
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.