New Office Space Demand Forecast: Signs of a Structural Shift

Posted on May 31, 2018

The NAIOP Research Foundation has published the NAIOP Office Space Demand Forecast for Q2 2018.

Key Takeaways

  • The U.S. office markets absorbed just 1.3 million square feet on a net basis in the first quarter of 2018, according to CBRE. 
  • This performance represents a significant conundrum, as every economic indicator used to forecast absorption performed at or above the forecast level. 
  • While the first quarter reading may be a one-time anomaly, it cannot be discounted that a structural shift in the office space market has or is occurring
  • The forecast for net absorption of office space has been reduced to 8.4 million square feet per quarter for the remaining three quarters of 2018.

On a positive note, many developers, lenders, and even tenants are not over-expanding or being overactive, meaning that there is a low likelihood that there will be excess space that they will need to vacate in a downturn.

View the Q2 2018 Forecast
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