© Reuters. A taxicab enters the financial district security zone near the New York Stock Exchange (NYSE) in New York City

(Reuters) – U.S. office vacancy rate rose to 16.7 percent in the fourth quarter from 16.4 percent a year earlier, according to real estate research firm Reis Inc.

Net absorption, measured in terms of available office space sold in the market during a certain time period, dropped to 7.4 million sq ft of office space in the quarter, compared with 7.6 million sq ft a year earlier.

New construction of office spaces declined to 10.4 million sq ft from 12.0 million sq ft.

Both asking and effective rents rose about 3 percent.

“Rent growth has been steady throughout the last eight years, but the rate of growth has barely edged out the rate of inflation,” Reis said.

U.S. office employment growth improved as the country added about 51,400 office jobs per month through November of 2018, up from an average increase of 49,000 jobs in the same period of 2017, according to the Reis report.

In terms of office employment growth, 50 of 79 metros saw stronger growth in 2018 than in 2017, and fewer metros saw significant declines as they had in 2017.

Higher completions in 2019 and an expected deceleration in office employment should push vacancy rates up a bit, but rent growth should remain positive and in line with recent growth rates, the report said.

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2019-01-02