Expansions Continue to Drive the US Office Market

The Old Post Office in Chicago has sat vacant since the mid-1990s, but the city has accepted a developer’s plan to transform it into new office space. The move added more than two million square feet to the nation’s development pipeline, now at a post-recession high.

CHICAGO—The US office market continues to expand at a steady clip, and although no seismic shifts are expected, growth could finally begin to moderate next year as employers slow down hiring, according to JLL researchers. The Chicago-based firm just released its third quarter office statistics, and found that more than 47% of all leases that exceeded 20,000 square feet were expansions, findings quite similar to what has been seen for several years. Nearly 42% of the leases did not change in size, and just 11% involved downsizing.

“Expansion activity continues to be the dominant driver, and it’s stable,” Julia Georgules, vice president, JLL Research, tells GlobeSt.com. “There has been no dramatic shift.” In fact, since January, the US office market has continued to record improved fundamentals and lingering uncertainty from 2015 has lessened as companies continue to grow and return to urban cores.