The U.S. Office Market Muscles Its Way through Uncertain Times, by Jones Lang LaSalle
2013 started off on a positive note with more than 40 percent of office markets that Jones Land LaSalle (JLL) tracks reporting increased touring activity and more than 98 percent of markets reporting either increased or stable touring levels from the fourth quarter 2012, according to the company’s Office Outlook United States Q1 2013 report. Further, leasing activity levels increased 15.9 percent from the fourth quarter of 2012 and were up 9.6 percent from the first quarter of 2012.
According to the report, 2013 will be characterized by a transitioning economy and market changes that will not only lead to a stronger and more diversified recovery in the years ahead, but will also fundamentally alter how users view and use office space.
The economy will transition from one defined by below-average economic and employment growth driven by a few geographies and sectors (in 2012) to one where growth across most markets and industries leads to economic and employment growth that beat consensus estimates (in 2014). The office market will transition from an overall tenant’s market (in 2012) to one favoring the landlord (in 2014) due to diversifying demand and limited new supply. According to the report: “The overall office market paradigm will transition from one driven by random buildings and spaces to real estate’s most fundamental principle: location due to the ever-increasing influences of demographics and technology.”
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