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Co-Star's State of the US Office Market report summary
CoStar’s
State of the US Office Market
presentation was on Tuesday January 24th. Anne-Marie Bairstow, Executive Director of the DC BID Council, attended and wrote this summary which we found very informative. (Anne-Marie was the previous AMPBID Executive Director also).
The slides and webinar are available on the CoStar website
www.costar.com
.
The takeaway was that the recovery is “good but not outstanding,” and that the Washington region could suffer if federal jobs continue to decline.
Some of the highlights:
· Office job growth is at 1.7% nationally, led by technology and energy sectors.
· 63% of submarkets have declining vacancy rates. The CoStar panelists felt this was a significant leading indicator of the economic recovery
· While employment is not back to pre-recession levels, GDP is, and retail spending is above pre-recession levels
· If the Fed raises the interest rates (which it is unlikely to do before the presidential election) then debt service costs will likely rise and cut significantly into consumer spending
· Corporate profits are way up, more than double 2002
· They forecast that jobs will be back to pre-recession levels in 4 years.
· They had a very interesting chart comparing recessions, showing that this recession was deeper than previous recessions, and that the recessions and the climb out of them are increasingly longer over time (i.e. pre-1974 recession and recovery was 1.5 year, but in 2001 it took 4 years)
· US healthcare spending is dramatically outpacing other nations, eating into our global competitiveness
· DC is #12 on the list of markets with the largest net absorption
· DC is #2 on the list of the most construction (behind NYC)
· DC is #2 in price per SF (at $354), behind NYC, but significantly ahead of Boston #3 ($290)
· CBD vacancy rates are significantly lower than suburban rates
There was a lot more in the presentation if you are interested. All of the slides should be on the CoStar website
www.costar.com
.
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