Office market on verge of rent boom

The office market may be close to expanding significantly.

A recent report from CoStar showed that office jobs are increasing throughout the United States, and this could continue to increase significantly over the next few years.

The organization's First-Quarter 2012 Office Review & Outlook showed that commercial property managers experienced 11 million square feet of office space absorption during the period. In addition, vacancy rates for these properties dropped to 12.7 percent, for a 100 basis point decline.

"Rents have come down, space is cheap relative to history, and companies are taking advantage of that to move, upgrade or expand into new space, and we've seen steep increases from the bottom of the market in 2009," said Jay Spivey, senior director of research and analytics for CoStar. "These leasing levels rival what we saw in the 2000 dot-com period."

Job growth has improved, but not as much as experts had hoped, the report noted. However, progress is occurring, and this could continue into 2015 when the unemployment rate is expected to drop to less than 6 percent. Office demand and rental increases are expected to show improvements as this continues.

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