Office vacancy rates in U.S. unchanged amid sluggish job growth

Sun Jan 5, 2014 11:57pm EST

People attend a job training and resource fair at Coney Island in New York December 11, 2013. REUTERS/Eric Thayer

People attend a job training and resource fair at Coney Island in New York December 11, 2013.

Credit: Reuters/Eric Thayer

(Reuters) - Office vacancy rates in the United States remained unchanged for the fourth quarter of 2013 because lackluster job growth and concerns about the economy muted demand for office space, a preliminary report by real estate research firm Reis Inc said.

The national vacancy rate during the quarter was 16.9 percent, similar to the levels Reis has observed over the past three years.

"With most of the employment growth continuing to come from low-paying, low-skilled jobs that don't utilize office space, demand remains weak," the report said.

The vacancy rate is down from a post-recession high of 17.6 percent in late 2010, but it is still well above the 12.5 percent average rate recorded in the third quarter of 2007.

The high vacancy rates continued to pressure rents, which were up an average 0.7 percent from the prior quarter.

"Landlords remain unable to drive asking rents upward or pull back on lease concessions," the report said.

New York reclaimed the title of tightest market - from Washington, D.C. - with a vacancy rate of 9.9 percent at the end of the fourth quarter. Washington fell to second place at 10.3 percent.

Reis said its outlook for 2014 was for moderate improvement versus 2013, but it emphasized that until there is growth in high-wage, high-skill jobs the need for office space will not accelerate.

(Reporting By Michelle Conlin; Editing by Grant McCool)

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Comments (2)
Harry079 wrote:
“The national vacancy rate during the quarter was 16.9 percent, similar to the levels Reis has observed over the past three years.”

I thought Reuters said in another story this morning that job growth has the highest since the invention of sliced bread?

Maybe people with jobs that still need to stand in bread lines don’t require much office space.

Jan 08, 2014 3:05pm EST  --  Report as abuse
Harry079 wrote:
From a Ruters story this morning.

“Companies added 238,000 jobs last month after an upwardly revised 229,000 in November, the ADP National Employment Report showed, easily topping expectations in a Reuters poll for a gain of 200,000. It was the largest monthly gain since November 2012 and brought the three-month average of corporate hiring to nearly 225,000 a month, the fastest such pace in 21 months.”

Jan 08, 2014 3:10pm EST  --  Report as abuse
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