US Office Market Will Stay Vigorous in 2018

Nashville has had the nation’s most dynamic office market, and illustrates how secondary cities have become so important.

CHICAGO—The US office market remained vigorous in 2017 with occupancy staying at peak levels and rents holding firm, according to a new report from Colliers International. The vacancy rate has been quite low for an unusually long stretch of time, and experts say the economy will most likely generate enough demand to sustain that dynamism even longer.

“We are in new territory,” Stephen Newbold, Colliers’ national director of office research, tells GlobeSt.com. “Normally, we see dramatic ups and downs,” but by the end of 2017, the vacancy rate had been static for eight successive quarters as supply and demand were in relative balance. It fell 30 bps in the fourth quarter to just 12.0%, or marginally lower than the level seen at the peak of the previous cycle.