Year-to-date returns for both apartment and office space grew by more than 23%, according to published data from the National Association of Real Estate Investment Trusts.
The US office market has seen vacancy rates tumble and rents soar. As GlobeSt.com reported previously in a conversation with Cushman & Wakefield chief operating officer for the firm's New York Metro Region Joe Harbert, we may be on the cusp of astronomical rents.
"A shortage of high-quality available space in Midtown and a lack of new product on the horizon have given landlords the upper hand," said Harbert, Cushman & Wakefield's chief operating officer for the firm's New York Metro Region.
The US office vacancy rate fell to 13.07% in the second quarter, from the prior quarter's 13.23% and down from a high of 16.4% at year-end 2003, according to the association.
Midtown saw average asking rents rise 12.1% to $66.85 per sf. Even the slower Downtown market saw rents rise 10.7% to $42.81. Downtown asking rents during the quarter rose 4.1%, to an average $37.60 per sf, while suburban rents rose 2.4% to $24.97 per sf. But in key cities where many REITs are concentrated, rents have soared much more. Year-to-date asking rents in Los Angeles are up 22.9%, San Francisco up 25.1%, and San Diego up 10%.
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