Q1 2019 Office Market Report

For office occupiers the news goes from bad to worse. The metro-wide vacancy rate fell 60 basis points during the quarter to 5.0%, an all-time record low (10-year average = 8.3%). To say the office leasing market is a landlord’s market would be an understatement. Tenants continue to have fewer and fewer options, and must be ready for the “take it or leave it” stance taken by many landlords. Relief is on the way [but on the horizon], but lower rents are unlikely, even with pending new supply. Even with a near record amount of office construction underway, sustained demand combined with very “sticky” lease rates are unlikely to significantly change conditions for office space occupiers.