LOS ANGELES—The office market experienced a small boom at the end of the year with the 1.1 million square feet of positive absorption—making it the strongest quarter in 2015, according to the 4Q15 office report from Newmark Grubb Knight Frank. As a result, the vacancy rate dropped to 14.5%. However, while this was the strongest market in the quarter in the year, the net absorption rate fell 10.7% below the 2014 total. Still, the quarter showed a surge leading into the next year, and analysts are optimistic.

“This was the strongest showing for net absorption for the year, which is a really good sign moving forward,” Michael Rudis, senior research analyst at NGKF, tells GlobeSt.com. “For part of the year, we were above the national rate, and now we are on par. That makes us really optimistic about the upcoming year. Employment growth is expected to pick up in the office occupying centers, like information, financial services and professional and business services, by 2.7% in the upcoming year. The means 25,000 new office using jobs. For those reasons, we are really optimistic for next year.” Rudis notes that those jobs would account for 4 million square feet of new demand. Don’t expect that to mean there will be 4 million square feet of absorption, he adds, noting that there is always the shadow market to consider.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2022 ALM Global, LLC. All Rights Reserved.