Emerging Themes in Office Market Recovery, by Colliers International
According to the Colliers International 4Q12 North America Highlights report, Intellectual Capital, Energy and Education (ICEE) office markets continue to capture a disproportionate share of North American office absorption. Two other positive influences that will impact the office market in 2013 are the housing recovery and the growth in medical office demand.
Other takeaways include:
- Medical office has been a sleeper office sub-property type that saw a 30 percent growth in transaction activity in 2012 to $6.1 billion, representing nearly 10 percent of the total $77.6 billion office property sales in 2012. In addition, approximately half of the 71 million square feet of office space under construction in the United States at the beginning of 2013 is for medical-related use.
- ICEE will continue to be an important space driver in markets like Atlanta and Detroit where auto technology is fueling demand for engineers, and the office space to house them.
- The housing recovery will benefit suburban office space demand as contractors and professional service providers (closing attorneys, architects, building inspectors, etc.) rebuild or expand their operations to service housing activity of approximately 1.0 million new units. Atlanta, Charlotte, Nashville, Phoenix, Tampa and inland California will see the most benefit.
- Net absorption is forecast to reach 57.5 to 60 million square feet, a 15 to 20 percent increase over 2012.
- Office transaction volume will exceed $80 billion.
- The CMBS office property delinquency rate will decrease below 10 percent.
Add a Comment
We welcome your thoughtful comments. Please comply with our Community rules. All comments will display your real name.