The U.S. office vacancy rate ticked up slightly sequentially and year over year in the first quarter, data from Reis Inc. show. Asking and effective rents also rose slightly.
At the end of the first quarter, the office vacancy rate stood at 16.5%, compared to 16.4% at the end of 2017 and 16.3% in the year-ago first quarter.
Average asking rent was $32.87 per square foot in the first quarter, up 0.8% quarter over quarter and 2.2% year over year, while average effective rent per square foot was $26.67, reflecting a 0.9% increase over the previous quarter and 2.2% increase year over year.
Reis noted that net absorption and construction outpaced 2017 quarterly averages in the 2018 first quarter. Net absorption was 6.2 million square feet in the most recent quarter, above the 5.9 million-square-foot quarterly average logged in 2017, and construction was 10.9 million square feet, ahead of the 10.6 million-square-foot quarterly average for 2017.
Of the 79 metropolitan areas tracked by Reis, New York City; San Francisco; and Washington, D.C., had the lowest vacancy rates at 8.3%, 9.9% and 10.4%, respectively, while Dayton, Ohio; Greensboro/Winston-Salem, N.C.; and Memphis, Tenn., had the highest vacancy rates at a respective 26.9%, 25.0% and 24.1%.
Charlotte, N.C., logged the largest quarter-over-quarter increase in effective rent at 1.6% to $20.60 per square foot, while Oakland-East Bay, Calif.; Boston; and San Francisco all saw effective rent growth of 1.5%. The highest effective rent per square foot was in New York, at $59.88, a 1.3% increase over the previous quarter.
Reis noted that only three markets notched declines in effective rent: New Haven, Conn., saw rents drop 0.2% to $17.38 per square foot; Fairfield County, Conn., reported rents down 0.2% to $29.95 per square foot; and Norfolk/Hampton Roads, Va., saw rents fall 0.3% to $16.38 per square foot.