This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

JLL Reports U.S. Office Market Makes Mild Gains In Absorption And Rent In 2012, With Stage Set For Broader Recovery In 2013

CHICAGO, Jan. 7, 2013 /PRNewswire/ -- The domestic office sector experienced steady but mild occupancy growth throughout 2012, buoyed by a few strong market sectors impacting leasing activity in a handful of states, according to a year-end analysis conducted by Jones Lang LaSalle (JLL). As the year drew to a close; however, several bright spots on the horizon suggested that the market expansion will broaden to other sectors and geographies in 2013.

(Photo: http://photos.prnewswire.com/prnh/20130107/CL37272-a )

(Photo: http://photos.prnewswire.com/prnh/20130107/CL37272-b

"The vast majority of occupancy growth in 2012 was in energy-rich and technology-heavy markets in California, Texas and Colorado. Recently there's been lease activity and growth in healthcare and housing-related industries, suggesting that strong office absorption in 2013 may extend to Arizona, Nevada, Florida, Georgia and the Carolinas, among other geographies," said John Sikaitis, Director of Office Research at JLL. "However, the U.S. office market outlook is still very segmented by sector and geography, with some urban and most suburban markets facing a long road to recovery."

2012 Commercial Real Estate Fourth Quarter Highlights

  • Leasing levels dip again: -6.8 percent from Q3; both Q4 and 2012 leasing below respective quarterly and annual levels since recovery began.
  • Absorption levels continue with 11 th consecutive quarter of occupancy growth, but vary widely by geography as the West grows and the East Coast disappears. Sunbelt markets are starting to add to the recovery.  Even with continued occupancy growth in Q4, 2012 absorption levels down 19.4 percent from 2011.
  • Vacancy drops, hits 17.0 percent. Vacancy levels remain near historical highs, and although CBDs are on track to reach historical vacancy rates faster than suburbs, CBD vacancy declines have slowed while suburban declines have sped up.
  • Tenants have far less leverage across urbanized, core markets despite overall market pause, but rents have now inched up in nine of the past 10 quarters. Class A continues to trump commodity across the board with rents growing more than four times faster in CBDs than suburbs.

National net absorption totaled 7.5 million square feet in the fourth quarter, bringing the total to 28.2 million square feet of space absorbed during all of 2012. Rents increased 3.1 percent over the course of the year, while rent abatement concessions fell by 10.8 percent and tenant improvement allowances decreased by 4.3 percent, Sikaitis said, indicating continued market tightening.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,912.11 -70.48 -0.42%
S&P 500 1,969.95 -8.96 -0.45%
NASDAQ 4,442.6980 -2.2110 -0.05%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs