AVAILABILITY FALLS SLIGHTLY
The national overall availability rate inched lower, falling from 18% to 17.9%. The Class A availability rate fell by 20 basis points, declining to 19.1%. Orange County registered a sharp 200 basis point quarteron-quarter decrease in its Class A rate, dropping to 19.9%. San Francisco posted a 210 basis point decline to 8.9%. In contrast, Austin's Class A rate jumped by 340 basis points to 15.2%.
ASKING RENT INCREASES
On a quarterly comparison, the national overall asking rent rose by 0.8% from $33.79 to $34.06. Class A asking rent increased by 1.8% to $38.70 in the second quarter and has jumped by 3.6% compared to the second quarter of 2017.
TRAILING LEASING PUSHES HIGHER
National four-quarter trailing leasing (the sum of activity over the last four quarters) increased from 218.6 million square feet (msf) to 228.8 msf – its highest mark since the fourth quarter of 2016.
"Flexibility has been a prominent feature in this cycle. Landlords in many markets are being more accommodating for a number of reasons – including space densification, the proliferation of flexible office space and a significant jump in tenant expectations. Similarly, as more employers struggle to find qualified employers, they are displaying flexibility and creativity in their hiring process."
Keith DeCoster, Savills Studley Research