LEASING JUMPS
Leasing activity spiked from 1.1 million square feet (msf) in the first quarter, to 1.7 msf in the second quarter. Nevertheless, tenants have leased only 5.2 msf in the four most recent quarters, falling well short of the long-term market average.
AVAILABILITY RATE REVERSES DIRECTION
Despite the flurry of larger leases completed in the quarter, the market’s overall availability rate jumped to 25.6%, a 30 basis point increase from the second quarter of 2017. The Class A availability rate rose by 50 basis points to 27.4%.
RENT DOWN SLIGHTLY
Average asking rent for the region inched down by 0.1%, falling to $27.78. The Class A asking rent fell by 0.5% to $28.38. Class A asking rent has fallen by 3.7% year-on-year.
WEAKER SALES
Office property sales in the last six months (through May of 2018) decreased by 42%— totaling $857 million, down from $1.5 billion in the previous six months.
“The efforts of developers to recapture massive vacant corporate campuses have met with varied success. The region added yet another such challenging complex, as the massive Toys“R”Us headquarters prepares to close its doors.”
Savills Studley Research