JLL Q4 U.S. Office Outlook
JLL’s Q4 U.S. Office Outlook highlights economic and real estate conditions in Q4 and forecasts for 2015 and beyond. Key findings from the recently released report include:
- Swelling corporate confidence and economic growth fueled net absorption of 54.7M s.f. in 2014 (36.7 percent increase from 2013), with 2015 forecast calling for growth to uptick by another 25 percent.
- Total vacancy declined 15M s.f. from year-end 2013—from 16.6 percent to 15.6 percent—its lowest point since 2008, with vacancy to dip close to 14.0 percent by early 2016.
- Rents increased across most U.S. markets in 2014, fueled more by a resurgent Class B sector in the past six months. Overall rents are forecasted to jump +/- 15.0 percent over the next 24 months.
- The construction pipeline increased by 68.4 percent year-over-year, from 47M s.f. to 79.6M s.f. in Q4 2014, with large upticks in groundbreakings creating tenant leverage again in 2016 and 2017
Watch the video below to hear JLL’s Managing Director of U.S. office market research, John Sikaitis, discuss the state of the office market and expectations for 2015.