Tenant's Guide

North America


  • Canada

    Office Market

    Job Growth
    1.2% (YOY)
    774,768 SF
  • US

    Office Market

    Job Growth
    1.02% (YOY)
    24.6M SF
  • US

    Industrial Market

    Job Growth
    1.02% (YOY)
    80M SF

Business Drivers

The global economy accelerated in the final quarter of 2016 due to a combination of improved conditions in emerging market countries and stronger growth in developed economies. It expanded 2.7% year-on-year in Q4, above the 2.5% rise in Q3 and the strongest print in the full year. Q4’s strong reading brought total growth for 2016 to 2.6%, a notch above the 2.5% previously forecast but well below 2015’s 3.0%. The biggest risk to the global outlook is a rise in protectionism, which could put an end to the era of multinational trade agreements that has defined global economics in recent decades.

In the United States, GDP expanded at a seasonally-adjusted annualized rate of 1.9% in the fourth quarter, which, despite decelerating notably from the 3.2% reading observed in the previous quarter, still contributed to a solid performance of the economy in the second half of the year. Household spending was once again the main engine of growth on the back of accelerating wage growth, near full employment and multi-year-high consumer confidence.

The economy continues to hum along at a respectable pace. Homebuilding and manufacturing are both retaining upward momentum in early 2017, signs of overheating in the U.S. labor market are still weak and investment should pick up pace once policy uncertainty dissipates and investors capitalize on higher oil prices.

Employment Situation

In the US, the unemployment rate, at 4.7 percent, and the number of unemployed persons, at 7.5 million, changed little in December. However, both measures edged down in the fourth quarter, after showing little net change earlier in the year. Total nonfarm payroll employment rose by 156,000 in December, with an increase in health care and social assistance. Job growth totaled 2.2 million in 2016, less than the increase of 2.7 million in 2015.

The unemployment rate in Canada increased to 6.9 percent in December from 6.8 percent in the previous month, in line with market expectations as more people participated in the labour market. Employment rose by 54,000 (+0.3 percent) in December, the result of gains in full-time work.

US Office Market Overview

Vacancy has decreased to 9.7%, down from Q3, and net absorption totaled a positive 24,653,312 sf. Vacant sublease space increased in Q4 to 46,520,461 sf. Rental rates ended the quarter at $24.30, an increase over the previous quarter. A total of 358 buildings were delivered to the market, bringing 18,486,841 sf of new space. There is 152,328,335 sf of additional space currently under construction.

US Industrial Market Overview

Industrial vacancy fell to 5.4% in Q4, with net absorption totaling positive 80,048,240 sf. Vacant sublease space decreased, ending the quarter to 41,392,976 sf. Due to decreased vacancy and increased demand, rental rates rose to $6.05. In Q4, a total of 473 buildings were delivered, adding 60,531,171 sf of space. There is 256,407,283 sf of industrial space currently under construction.

US Employment Growth

Dallas: 124,147
Los Angeles: 90,945
Detroit: 67,321
Miami: 56,160
Seattle: 55,931
Boston: 36,935
San Francisco: 23,456
Philadelphia: 11,589
Chicago: 2,383
New York: -153,611
Education & Health: 593,000
Bus. & Prof. Services: 522,000
Trade, Tran. & Utilities: 373,000
Leisure & Hospitality : 295,000
Government: 183,000
Financial: 159,000
Construction: 102,000
Information: -2,000
Manufacturing: -45,000
Mining & Logging: -80,000

North America Office and

Industrial Fundamentals

The US industrial market finished Q4 with a positive absorption of 80,048,240 SF and vacancy of 5.4%. In the office market, vacancy decreased to 9.7% with net absorption at a positive 24,653,312 SF. The Canadian office market finished Q4 with a positive absorption of 774,768 SF and vacancy of 12.1%.

US Office and Industrial Markets Absorption and Completions

Market Highlights


In the Class A sector, the vacancy rate for the office market remained at 12% percent in Q4. The Class B vacancy decreased in Q4, down to 9.9% versus 10.1% in Q3 and 10.3 in Q2. Class C registered the lowest vacancy at 6.1%, which was down from Q3.

The quoted average asking rental rate for all classes in the office market increased to $24.30/sf in Q4 compared to $23.97 in Q3. The Class A sector increased slightly to $30.44 in Q4 compared to $30.20 in Q3, while the Class B sector rose slightly to $21.57 from $21.28 in Q3.

Delivery of buildings in the office market decreased in Q4 to 358 buildings, totaling over 18 million square feet. There was over 152 million SF of office space under construction at the end of Q4.


The national office market experienced a strong rebound in the fourth quarter with 774,768 sf of positive absorption. This positive Q4 wasn’t enough to offset the beginning of the year, and 2016 ended with 297,964 sf of negative net absorption. The Calgary market had a large impact on the national absorption rate, and excluding that market, Canada’s 2017 absorption would have been over four million sf, above the long term average of 3.5 million sf. Canadian vacancy rates have been consistently rising, driven primarily by significant new supply and the weakened economy in Alberta.

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 5.4% percent – the lowest it’s been since Q3 2001. This low availability caused the average asking rental rent to rise to $6.05 per square foot.

The overall vacancy rates for the US have continued to decrease, and the Canadian office market vacancy rate has increased to 12.1%.