US Office Market Adds 6 Million Square Feet as Trophy Rents Jump More Than 20%
Updated
Updated · CNBC · Oct 14
US Office Market Adds 6 Million Square Feet as Trophy Rents Jump More Than 20%
3 articles · Updated · CNBC · Oct 14
Summary
JLL reported a fifth straight quarter of positive net absorption, with U.S. office occupiers adding 6 million square feet in the third quarter and signed leases averaging a 13% larger footprint.
Supply is tightening faster than demand is recovering: only 3.5 million square feet was delivered in the quarter, while 9.6 million square feet was removed through conversions or redevelopments.
That imbalance has cut national office inventory by 45 million square feet since the end of 2023, with just 23 million square feet now under construction.
Premium space is bearing the brunt of the shortage, lifting effective rents for first-generation trophy offices more than 20% from a year earlier and pushing second-generation rents up 10%.
Tech-led demand in San Francisco and Austin and stronger Sun Belt leasing are driving the rebound, while scarce equity capital is keeping new construction at about 9% of normal annual supply.