Rate of price increase “hasn’t been seen since before the Great Recession”
Prices for prime US office assets have risen sharply in 2019, according to a new report.
Per-square-foot prices for central business district buildings across the US are 24.6% higher than they were last year, while sales of buildings with A+ and A ratings have gone up 12.1%, according to a new report from commercial real estate research firm Yardi Matrix.
The report also revealed that office property transactions, spurred since summer by lower interest rates, totaled $74 billion through October.
“This rate of increase in CBD prices hasn't been seen since the years before the Great Recession,” said the report. “The rapid increase in pricing is a trend we will closely monitor.”
Demand for office space remained strong in 2019, with employment in office-using sectors increasing by 1.7% over the past 12 months. Average national listing rates were up 2% in October from the same period last year while the vacancy rate increased 40 basis points from the previous month, reaching 13.7%.
