According to CBRE Group, vacancy rates in the U.S. office market saw a modest decline of 10 basis points (bps) during the second quarter of 2016 (Q2 2016), dipping to 13.0%.
The national office vacancy rate remains at the lowest level since 2008, with a 40-bps decline over the past year.
The suburban vacancy rate decreased by 20 bps, to 14.4%, while downtown vacancy increased by 10 bps, to 10.5%.
"We continue to see slow, steady improvement in office market fundamentals, with most markets remaining in balance with stable demand, limited new supply and modest rent growth," said Jeffrey Havsy, Americas' chief economist for CBRE. "While global economic uncertainty has led some tenants to slow decision making on new space we remain on a path that balances tenant demand with space availability."
Vacancy continued to improve in a majority of U.S. markets, declining in 38 of 63 office markets and remaining unchanged in five. The largest quarterly declines were recorded in two Florida markets--Orlando (110 bps) and Jacksonville (100 bps)--and Las Vegas (100 bps). St. Louis, Phoenix, Richmond, Sacramento, San Antonio, Minneapolis, Newark and Oklahoma City each declined by at least 70 bps.
Over the past year mid-sized cities have set the pace for improved market conditions. These markets include Orlando, Oakland, Phoenix, Detroit, Nashville, San Jose, Jacksonville, St. Louis, Albany, Charlotte and Milwaukee. The nation's lowest vacancy rates in Q2 2016 were in Nashville (6.1%), San Francisco (6.2%), San Jose (8.6%), Austin (8.7%), Seattle (8.9%) and Pittsburgh (9.0%).