Bullish job market drives asking rents up; 10-year Treasury rate drop could spur sales
SANTA BARBARA, Calif., June 27, 2019 – U.S. office properties, riding an ongoing strong job market, saw asking rents rise 0.4% in May 2019 over the previous three-month period, according to a new national report from Yardi® Matrix.
The report notes that although 173 million square feet of office space is under construction, the pipeline is mostly concentrated in metros that have growing space needs or a strong demand for newer product with updated technology and amenities. Brooklyn, N.Y., Nashville, Tenn., and Austin, Texas, have the most space under construction as a percentage of existing stock, while Manhattan, N.Y., has 20.8 million square feet—more than twice as much as any other metro. The national occupancy rate held steady at 13.7% in May.
Year-to-date sales totaling $28.5 billion through May were “weak compared to recent years, but activity could pick up as capital markets begin to settle down,” the report says; meanwhile, “institutional capital continues to pour into the industry” and the recent drop in the 10-year U.S. Treasury rate could boost sales.
View the full Yardi Matrix national office report for June 2019.
Yardi Matrix offers the industry’s most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. Yardi Matrix covers multifamily, industrial, office and self storage property types. Email [email protected], call 480-663-1149 or visit yardimatrix.com to learn more.
About Yardi
Yardi® develops and supports industry-leading investment and property management software for all types and sizes of real estate companies. Established in 1984, Yardi is based in Santa Barbara, Calif., and serves clients worldwide. For more information on how Yardi is Energized for Tomorrow, visit yardi.com.