Key trends affecting the office sector
Dive in to the key sector indicators and values as well as detailed trends in the full
Tenant improvement allowances have jumped 10.5 percent since 2014 as landlords face a more competitive leasing environment. Increased concessions are helping reduce the pain tenants are feeling as a result of rising face rents.
With 11.7 million square feet of new deliveries in Q2, total vacancy rose for the third consecutive quarter to 14.8 percent. Increases were found across asset types and geographies, particularly within the Class B segment, as tenants opted for newer product.
After a slow Q1, net absorption rose to a healthier 8.4 million square feet during Q2. This is still below levels seen in 2014, 2015 and 2016. Growth is expected to remain muted as relocations to new supply and give-backs of second-generation space occur.