WASHINGTON, DC-For all the angst over the sequestration and lackluster local markets, Washington DC still enjoys low office vacancy rates. Very low, in fact, when stacked up against other markets, according to the National Association of Realtors' quarterly commercial real estate forecast.
NAR reports that vacancy rates in the office sector are expected to decline from a projected 15.7% in the third quarter to 15.5% in the third quarter of 2014.
The report also notes that the markets with the lowest office vacancy rates at the moment -- now, in the third quarter -- are Washington, DC, with a vacancy rate of 9.7%; New York City, at 9.8%; Little Rock, AK, 12.1%; and Birmingham, AL, 12.4%.
Office rents should increase 2.5% this year and 2.8% in 2014. Net absorption of office space in the US, is seen at 30.1 million square feet this year and 41.6 million in 2014.
Office is the only category in which Washington DC can boast a lead though. Other asset classes, such as multifamily, retail and industrial, are more favorably disposed to different cities.
For example:
The areas with the lowest industrial vacancy rates currently are Orange County, CA, with a vacancy rate of 3.8%; Los Angeles, 4%; Miami, 5.9%; and Seattle at 6.4%.
Markets with the lowest retail vacancy rates include San Francisco, 3.9%; Fairfield County, CT, at 4.1%; Long Island, NY, 5%; and Orange County, CA, at 5.5%.
Areas with the lowest multifamily vacancy rates currently are New Haven, CT, at 1.9%; Syracuse, NY, 2%; New York City and San Diego, at 2.1% each; and Minneapolis, 2.2%.
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