Rising Employment Fuels Office Rent Growth, Yardi Matrix Reports
Professional and business services drive demand for space; new supply projected to top 2018’s total
SANTA BARBARA, Calif., March 26, 2019 – U.S. office rents are rising on strong demand and steady supply absorption, according to a new report from Yardi® Matrix.
The report, which compiles office market data collected by Yardi Matrix, identifies solid office employment growth as the principal driver of demand. Professional and business services comprise the fastest growing segment of the economy; office-using sectors added 642,000 jobs over the 12 months ending in February 2019. That produced a 0.7% national increase in asking rents over the last three months, led by tech-centric centers San Francisco, Silicon Valley, Boston and Austin, Texas, along with Philadelphia, Atlanta, Tampa, Fla., and Phoenix.
More than 171 million square feet of space was under construction as of February, representing inventory growth of 2.9%. Deliveries in 2019 should top 2018’s cycle peak of 70 million square feet, the report says.
Read the full Yardi Matrix national office report for March 2019.
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