- Posted at 10:10, January 06, 2014
- By QuidnuncRE Staff
The Wall Street Journal today say that the there are signs that the pace of office leasing is going to pick up in 2014.
A new report the article examines, from real estate data firm Reis, found that an additional 8.5 million square feet of office space was leased in 2013's fourth quarter, a small 0.25% increase from the third quarter.
But it was the largest gain since 2007's third quarter.
With the completion of 9.1 million square feet of new office space in the quarter, the vacancy rate held steady at 16.9%, unchanged from 2013's third quarter, and the current absorption rate means it would take two years of renting to reach the late 2007 peak of nearly 3.5 billion square feet of occupied office space.
The vacancy rate has fallen from 17.6% in early 2011, reports Reis, which surveys 79 U.S. office markets, but it still is significantly above the low of 12.5% in 2007's third quarter of 2007.
But the analysis says that the Beltway debt ceiling and mandatory budget cuts which made for a crisis environment last year are now being worked on, and the Federal Reserve has backed keeping interest rates low.
Those factors, combined with employment gains, put Reis's preliminary projections for office-vacancy rates declining "by roughly half a percentage point by year's end and asking rents to increase 2.8%, the largest gain since 2007."