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The commercial property service provider is convinced that America’s office space markets are stabilising as 2011 gets underway and points to the nation’s capital as leading the way.
In its annual Global Market Report, the New Jersey-based company has reflected on a tough time for office space markets across America and around the world but noted that major companies are increasingly keen to renegotiate and extend their office leases while prices remain relatively low.
For Washington DC, office renting activity has been driven primarily by demand from the federal government in recent months, which has enabled the city to retain a strong position even as office markets in cities like Atlanta, Los Angeles and Chicago have struggled to stem rising vacancy rates.
According to NAI Global: “The nation’s capital is its strongest office commercial real estate market. It continues its track to recovery propelled by federal government activity in 2010.”
On a more general note, Jeffrey M Finn, president and chief executive of NAI Global, said: “Although 2010 was another very challenging year for the industry, we began to see clear signs that the global economy and commercial real estate markets had stabilised and were beginning to improve with a noticeable pick-up in transaction volume around the world.”
The real estate expert describes Asia as “leading the global economic recovery” and notes particularly impressive growth rates in China, Hong Kong, South Korea and Taiwan. Office space conditions in Europe meanwhile are expected to “remain challenging in 2011”.
NAI was reviewing matters in general terms but a report from CB Richard Ellis recently suggested that London is performing well and proving to be the exception as far as European office space markets are concerned.
Editor’s notes: In the first quarter of 2023, Washington D.C’s office space vacancy rate stood at 19.2 per cent reflecting an increase of just over 3 per cent in three years.
It was also approximately 3 per cent higher than the US national average of 16.4 per cent.
In the same quarter, there was 1.34 million square feet of space under construction or renovation, reflected by just a handful of projects.
Notably, there was 2.1 million of office space available via subletting deals which was the largest amount ever seen in the Washington D.C office space market.