Cushman & Wakefield’s 2015-2017 US Overview & Forecast is now available. The U.S. office market ended 2014 on solid footing and is poised for even stronger growth through 2017. The economic environment over the next three years will be the best for the office real estate sector in more than a decade. The combination of rising employment and total income, strong consumer spending and business investment growth will likely lead to strong demand across all property types. Although the occupier trend toward efficiencies is expected to continue, with fewer square footage allocated per employee, job growth will be strong enough to drive down vacancies.
Absorption over the next three years is forecast to total 175 million square feet, which is more than the past eight years combined. New supply will hit the market at growth rates not seen since 2008 and while older-generation office buildings sit empty in many markets across the country, occupiers’ appetites for new or completely rehabbed properties show no signs of abating. Not only are occupiers seeking efficiencies that only new or renovated space can provide, but they are using this space as a tool to enhance their brands, and thus attract and retain a pool of young talent.