Office vacancies in U.S. cities dropped to the lowest rate in more than three years in the second quarter, with San Francisco, Miami and Washington increasing occupancies amid an improving economy.
The vacancy rate for central business districts in U.S. cities fell to 13.7% from 14.2% in the previous three months and 15% a year earlier, according to data provided by New York-based real estate service provider Cushman & Wakefield. Last quarter's vacancy rate was the lowest since 2002's first quarter, when it was 13.2%.
Companies are leasing additional office space as they add jobs or prepare to hire workers, giving a boost to landlords. The jobless rate last month dropped to the lowest since September 2001, according to the Labor Department. The average office rent in the second quarter was $25.17 a square foot, up from $24.73 a year earlier and $25.04 in the previous three months.
"It has been the fact that we've been adding jobs, usually 200,000 a month," said Maria T. Sicola, senior managing director for research services at Cushman. As for available space, "it's been the classic supply-demand paradigm. We haven't seen as much construction lately."