US office space market showing gains

The Central Business District (CBD) office market in the United States has seen the largest quarterly decline in the overall average vacancy rate since 2007 in the second quarter of this year.

The overall average vacancy rate for US CBDs fell to 13.9% at the midyear point of 2011, down 0.7% from 14.6% at the end of the first quarter of this year, and is at its lowest level since the middle of 2009, when vacancy measured 13.7%, the latest data from Cushman & Wakefield shows.

Vacancy rates declined in 71% of the markets tracked by Cushman & Wakefield, with the strongest drops in markets including Miami, Midtown South Manhattan and Washington, D.C.

The trigger for the significant decline in vacancy was a notable increase in new leasing activity in US CBDs, up 43.9% from midyear 2010 levels. With 41.8 million square feet in new office leases signed year to date, the first half of 2011 proved to be the strongest in terms of leasing activity since 1998, when 44.5 million square feet in leases were completed in the first half of the year. In the second quarter of 2011 alone, 23.6 million square feet in leases were signed, the highest three month total since the third quarter of 2006.

Source: NuWire Investor