U.S. Office Market Grows, Despite Bumpy Ride, by Jones Lang LaSalle
The United States economy and office sector remained resilient entering the summer of 2013, despite continued shocks that have jolted the global economy in recent weeks and months, according to the Jones Lang LaSalle (JLL) Office Outlook United States Q2 2013 report. The JLL report noted that besides the geopolitical strife across the globe, there were also signs of an economic slowdown resurfacing in China and a sense of stagnation across most of Europe.
Even with a bumpier global ride and a less favorable interest rate environment that seems to be ahead, the U.S. economy and the office market continued to grow. With a broadening recovery geographically forecasted in the second half of 2013 and into 2014, the office sector will shift to a market that begins to favor the landlord over the tenant.
For the past four years, the U.S. office market performance has moved like a roller coaster, showing signs of momentum, followed by signs of stagnation, followed by even signs of a contraction, according to the JLL report. With solid economic footing behind it domestically, however, momentum has increased and stability has arrived over the past five quarters. During that timeframe, the market has tightened considerably and posted some impressive performances quarter to quarter.
Back five quarters ago, any market tightening that occurred was largely taking place in northern California, the upper Northwest and Texas from a geographic perspective. However, as the economy has picked up with respect to increased job growth, continued record corporate profits and a diversifying economic engine beyond technology and energy, the shape and scope of the recovery has broadened and diversified as well.
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