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.

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