Reaction to Global Uncertainty Gives CRE Some Pause

In the first half of 2016, Austin had 653,800 square feet absorbed.

AUSTIN, TX—Tenant demand for US office space slowed in the first half of the year as businesses recalibrated and reacted to global economic uncertainty. Despite the deceleration, vacancy remained steady and rents jumped to the strongest growth rate in seven years, according to Cushman & Wakefield’s latest report.

The US office sector absorbed 14.7 million square feet of space in the second quarter of 2016, up 24.9% from the levels observed in the prior quarter but down 36% from a year ago. In the first half of 2016, net absorption was off by 34% from the strong levels registered in the first half of 2015. Midtown Manhattan had the largest amount of space absorbed at 2.3 million square feet, followed by Chicago at 1.3 million square feet, Phoenix and Philadelphia, both at 1 million square feet. The remainder of the top seven included Dallas/Fort Worth with 860,600 square feet, Detroit with 675,000 square feet and Austin, TX at 653,800 square feet.