Tenant's Guide

North America


  • Canada

    Office Market

    Job Growth
    .9% (YOY)
    2.3M SF
  • US

    Office Market

    Job Growth
    1.0% (YOY)
    16.7M SF
  • US

    Industrial Market

    Job Growth
    1.0% (YOY)
    71.8M SF

Business Drivers

The recovery in the global economy is gaining steam, due to an improvement in both advanced economies and emerging-market countries, with the GDP expanding 3.1% annually in Q2. In developing countries, economies are benefiting from resilient global demand and more stable financial markets. However, recent uncertainty in some key commodity prices has the potential to derail the economic recovery in some key economies. Among developed economies, the Euro area economy is in a sweet spot on the back of a declining unemployment rate, accommodative monetary conditions and a stable political environment.

In the United States, while the economy accelerated in Q2 due to renewed gains in the job market, political uncertainty continues to cloud the economic outlook. Even so, the economy should expand at a solid pace this year thanks to a robust job market, upbeat business and consumer sentiment and a turnaround in non-residential investment growth.

Employment Situation

Both the unemployment rate, at 4.3 percent, and the number of unemployed persons, at 7.0 million, changed little in July. After declining earlier in the year, the unemployment rate has shown little movement in recent months.

The unemployment rate in Canada decreased to 6.3 percent in July from 6.5 percent in the previous month and better than market expectations of 6.5 percent. It is the lowest jobless rate since October of 2008. The number of unemployed persons fell by 23.5 thousand while employed rose 10.9 thousand, beating market consensus of a 10 thousand increase.

US Office Market Overview

Vacancy has fallen to 9.6% and net absorption totaled a positive 16,687,228 sf. Vacant sublease space increased in Q2 to 51,143,142 sf. Rental rates ended the quarter at $24.40, a small decrease over the previous quarter. A total of 428 buildings were delivered to the market, bringing 20,978,221 sf of new space. There is 158,822,807 sf of additional space currently under construction.

US Industrial Market Overview

Industrial vacancy fell to 5.1% in Q2, with net absorption totaling positive 71,763,045 sf. Vacant sublease space decreased, ending the quarter at 38,986,716 sf. Due to decreased vacancy and increased demand, rental rates rose to $6.22. In Q2, a total of 537 buildings were delivered, adding 64,424,137 sf of space. There is 272,364,872 sf of industrial space currently under construction.

US Employment Growth

Miami: 108,475
New York: 89,120
Dallas: 87,539
Boston: 77,197
Los Angeles: 66,437
Seattle: 27,400
Philadelphia: 15,016
Detroit: 11,441
San Francisco: 4,784
Chicago: -38,079
Bus. & Prof. Services: 586,000
Education & Health: 507,000
Leisure & Hospitality : 350,000
Construction: 186,000
Financial: 148,000
Trade, Tran. & Utilities: 129,000
Government: 112,000
Manufacturing: 63,000
Mining & Logging: 51,000
Information: -47,000

North America Office and

Industrial Fundamentals

The US industrial market finished Q2 with a positive absorption of 71,763,045 SF and vacancy of 5.1%. In the office market, vacancy dropped to 9.6% with net absorption at a positive 16,687,228 SF. The Canadian office market finished Q1 with a positive absorption of 2,286,312 SF and vacancy of 12.4%.

US Office and Industrial Markets Absorption and Completions

Market Highlights


In the Class A sector, the vacancy rate for the office market increased to 12.4% percent in Q2. The Class B vacancy decreased in Q2, down to 9.5% versus 9.7% in Q1 and 9.9% in Q4. Class C registered the lowest vacancy at 5.8%, which was down from Q1.

The quoted average asking rental rate for all classes in the office market decreased slightly to $24.40/sf in Q2 compared to $24.44 in Q1. The Class A sector decreased to $30.38 in Q2 compared to $30.71 in Q1, while the Class B sector rose to $21.71 from $21.59 in Q1.

Delivery of buildings in the office market increased in Q2 to 428 buildings, totaling over 21 million square feet. There was over 158 million sf of office space under construction at the end of Q2.


Q2 was another strong quarter for the Canadian office market, with 1.5M sf of positive absorption, bringing the year-to-date total to 2.28M sf. Although the overall market continues to deliver healthy results, the total vacancy rate was 12.4% in Q2 compared to 12% in Q1. This was the result of 2.57M sf of new construction, of which over 43% was added as available to lease space. Top performing office markets were once again Vancouver and Toronto, where demand continues to outpace supply.

Top US Office and Industrial Markets Absorption YTD

Outlook and Opportunities

for Tenants

How can corporate tenants and occupiers use these statistics to their advantage?  Look at our local tenant guides to review the data that is specific to your market(s). By arming yourself with market data, you will have the knowledge you need to make smart decisions about your real estate portfolio, or to make the most of your next lease negotiation. Please contact us for more detailed market information, or with any additional inquiries.

With a growing demand for warehouse and distribution space, vacancy in the US industrial sector dropped to 5.1% percent – the lowest it’s been since Q3 2001. This low availability caused the average asking rental rent to rise to $6.22 per square foot.

The overall vacancy rates for the US have continued to decrease, while the Canadian office market vacancy rate has increased to 12.4%.