Nation’s office landlords can expect improvements in occupancy
Office landlords can expect to see gradual improvement in tenant demand for space this year, but employers will continue to be cautious about expanding, a real estate brokerage said.
The office sector of real estate will be bolstered by the improving economy, which should drive more purchases of buildings by investors, Marcus & Millichap reported.
Based on its research, the brokerage expects office-using employers to create about 720,000 jobs in the U.S in 2012, a 30% increase over last year. That hiring will absorb empty office space, but not as much as it might have in previous recoveries.
“Despite rapidly improving profits, American firms will remain cautious,” said Hessam Nadji, Marcus & Millichap’s managing director of research. Many companies still rent empty space they need to grow into before taking additional space, and others are fitting more workers into smaller quarters.
Los Angeles slipped from seventh to 10th place on Marcus & Millichap’s annual office index as Southern California office-using employment gains lagged those of other markets. San Francisco, New York and Houston ranked at the top.
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