(Reuters) - The U.S. office vacancy rate fell to 16.5 percent in the third quarter from 16.6 percent in the second, research firm Reis Inc (REIS.O) said.
“Continued gains in the labor market are driving increased demand for office space,” Ryan Severino, senior economist at Reis, said.
“Over the last seven quarters, not only has the number of total jobs created per month gradually increased, but the number of higher-wage, office-using jobs has also increased,” Severino said in a statement on Wednesday.
Washington D.C. remained the tightest market, with a vacancy rate of 9.0 percent. New York followed at 9.2 percent.
Vacancy is expected to compress by another 10 to 20 basis points during the fourth quarter, along with an acceleration in rent growth, Severino said.
The asking and effective rents increased by 0.6 and 0.7 percent, respectively, in the third quarter.
Reporting by Abinaya Vijayaraghavan in Bengaluru; Editing by Maju Samuel