Joshua A. Harris

Herndon, VA—-The U.S. office market posted solid net absorption levels in the second and third quarters of 2018 of 18 million and 11 million square feet, respectively, says the NAIOP Office Space Demand Forecast, Fourth Quarter 2018. This level of new leasing is more than likely due to higher-than-expected economic growth and the subsequent demand brought about by jobs created in the office-using sectors.

“The economy has been very strong, growing at annualized rates above 3% for much of 2018 and many office using sectors, such as professional and business services, have seen employment growth at rates as much as 50% higher than the general rate of job growth,” says Joshua A. Harris, Academic Director and Clinical Assistant Professor of Real Estate at the Schack Institute of Real Estate. “Furthermore, co-working firms are also aggressively leasing space and starting to really drive down vacancy is some submarkets,” he tells GlobeSt.com.

There are limitations, though, to this growth. The growing lack of qualified employees to hire is a major factor. Another consideration: long-term growth will be determined by how the business sector reacts to rising wages and interest rates.