Tenant's Guide

North America


  • Canada

    Office Market

    Job Growth
    1.1% (YOY)
    1M SF
  • US

    Office Market

    Job Growth
    1.01% (YOY)
    10.8M SF
  • US

    Industrial Market

    Job Growth
    1.01% (YOY)
    57.9M SF

Business Drivers

The global economy started 2017 on solid footing, with GDP expanding 2.8% annually in Q1, matching Q4’s result. Emerging markets continue to gradually recover on the back of a pick-up in global demand and higher commodity prices, while advanced economies are generally benefiting from resilient domestic demand. Growth in China was stronger than previously anticipated, but dynamics in the United States softened. The UK’s strong resilience observed since last year’s referendum is starting to fade as consumers are feeling the pinch of weak wage growth and high inflation. As a result, GDP growth slowed to a one-year low in Q1.

In the United States, GDP grew a meager 0.7% in Q1, confirming earlier signs that the U.S. economy has experienced a bumpy ride at the outset of the year. Subdued household spending—particularly in the automotive sector—mostly reflected payback for breakneck growth in the latter half of 2016, while feeble growth in utilities consumption mainly reflected the mildness of this year’s winter.

Employment Situation

In the US, the unemployment rate, at 4.4 percent, and the number of unemployed persons, at 7.1 million, changed little in April. Over the year, the unemployment rate has declined by 0.6 percentage point, and the number of unemployed has fallen by 854,000.

The unemployment rate in Canada decreased to 6.5 percent in April of 2017 from 6.7 percent in the previous month and below market expectations of 6.7 percent. It was the lowest jobless rate since October of 2008, as the number of unemployed persons fell by 48.7 thousand while employed rose by 3.2 thousand, below market consensus of a 10 thousand increase.

US Office Market Overview

Vacancy has remained at 9.7% and net absorption totaled a positive 10,781,092 sf. Vacant sublease space increased in Q1 to 49,509,239 sf. Rental rates ended the quarter at $24.44, an increase over the previous quarter. A total of 339 buildings were delivered to the market, bringing 21,291,741 sf of new space. There is 154,430,090 sf of additional space currently under construction.

US Industrial Market Overview

Industrial vacancy fell to 5.3% in Q1, with net absorption totaling positive 57,854,121 sf. Vacant sublease space increased, ending the quarter to 41,421,640 sf. Due to decreased vacancy and increased demand, rental rates rose to $6.14. In Q4, a total of 517 buildings were delivered, adding 63,349,697 sf of space. There is 268,096,457 sf of industrial space currently under construction.

US Employment Growth

Dallas: 129,700
New York: 108,200
Los Angeles: 107,600
Miami: 65,400
San Francisco: 63,000
Seattle: 61,200
Philadelphia: 57,000
Boston: 42,200
Detroit: 40,200
Chicago: 34,400
Bus. & Prof. Services: 586,000
Education & Health: 497,000
Leisure & Hospitality : 275,000
Trade, Tran. & Utilities: 186,000
Financial: 175,000
Construction: 160,000
Government: 145,000
Manufacturing: 34,000
Mining & Logging: 24,000
Information: -55,000

North America Office and

Industrial Fundamentals

The US industrial market finished Q1 with a positive absorption of 57,854,121 SF and vacancy of 5.3%. In the office market, vacancy remained at 9.7% with net absorption at a positive 10,781,092 SF. The Canadian office market finished Q1 with a positive absorption of 1M SF and vacancy of 12%.

US Office and Industrial Markets Absorption and Completions

Market Highlights


In the Class A sector, the vacancy rate for the office market increased to 12.3% percent in Q1. The Class B vacancy decreased in Q1, down to 9.7% versus 9.9% in Q4 and 10.1 in Q3. Class C registered the lowest vacancy at 5.9%, which was down from Q4.

The quoted average asking rental rate for all classes in the office market increased to $24.44/sf in Q1 compared to $24.31 in Q4. The Class A sector increased slightly to $30.71 in Q1 compared to $30.44 in Q4, while the Class B sector rose slightly to $21.59 from $21.57 in Q4.

Delivery of buildings in the office market decreased in Q1 to 339 buildings, totaling over 21 million square feet. There was over 154 million SF of office space under construction at the end of Q1.


The Canadian office market came in just shy of 1 million sf of positive absorption in Q1. The growth was a result of major activity in Toronto, Vancouver, and Montreal, and a bottoming out of the Calgary market which recorded negative net absorption well below the two-year quarterly average. As a result, the national total vacancy rate fell 20 points from Q4 to 12%. This is a major turnaround, as the vacancy rate has increased for the past 18 quarters.

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 5.3% percent – the lowest it’s been since Q3 2001. This low availability caused the average asking rental rent to rise to $6.14 per square foot. 

The overall vacancy rates for the US have continued to decrease, and the Canadian office market vacancy rate has decreased to 12%.