This Day On The Street
Continue to site
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

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: )


"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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.99 0.31%
FB $102.01 0.10%
GOOG $682.40 -0.10%
TSLA $151.04 0.38%
YHOO $27.04 1.05%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs