Office Markets Have Bottomed - Office Job Growth Spurs Positive Net Absorption; Office Vacancy Rates Have Peaked with Some Markets Even Seeing Increases in Average Rent

By Mark Heschmeyer on CoStar


Fundamentals in U.S. office markets appear to have stabilized and are headed toward an expected recovery, according to CoStar Group in its The State of the U.S. Office Market: Mid-Year 2010 Review &
Forecast.


In its detailed quarterly analysis of the U.S. office market, CoStar Group confirmed positive net absorption for the quarter and office vacancy rates that appear to have peaked and are no longer rising.

“As we anticipated two quarters ago, it now appears we have hit the bottom of the market in terms of vacancy and that is critical here in this business,” said Andrew Florance, CEO of CoStar. “The fact that we
are clearly showing some sort of bottom and we don’t have a significant
increase in vacancy this quarter is very positive news.”


In presenting the latest findings based on CoStar’s research, Florance sought to dispel confusion over the office market’s performance that may have resulted from conflicting media reports.


[BLOGGER COMMENT: In an earlier post this blogger noted the fact that Florida office assets are now trading for substantially below replacement cost. My conclusion is that this appears to be an
outstanding entry point for investors that have been on the sidelines
waiting for a buy signal.]


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