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David Kluth David Kluth

Office leasing activity continued to slow in the first quarter of the year, according to a first quarter report from Newmark Knight Frank. Quarterly absorption was flat at 63,902 square feet, and the vacancy rate continued to remain at 14% as it has for the last 10 quarters. While there were gains in some markets—namely Downtown Lo Angeles—the leasing velocity overall has slowed. While the knee jerk response is to assume economic issues, David Kluth of Newmark Knight Frank, says that the real reason is the high level of employment.

“Our research shows that white-collar employment is nearing peak levels, and white-collar employment is decelerating,” Kluth, an executive managing director and office market expert at NKF, tells GlobeSt.com. “The gains in white-collar job jobs has been under 2% for the last year and a half, and that has really had an impact on the Los Angeles office market. Job growth decelerating is really the reason we have seen leasing activity slow compared to prior quarters.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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