Thought the housing market was bad?
WSJ reported 4/3/09 that the office vacancy rate for the U.S. rose to 15.2% for the first quarter of 2009, up from 14.5%. Three years ago, in the first quarter of 2006, it was 7.1%, according to Reis. The vacancy rate has been rising for almost two years.
In 2006, Reis analyzed construction and absorption of newly constructed space, as well as economic and demographic trends, and predicted an 11% vacancy rate in 2009. However, their predictions were that vacancy rates would be falling from a high of 12% in 2007.
2008 turned out to be the “rare event”, that event in any series of events that throws off all projections. Job layoffs have been responsible for the glut of supply of office space being dumped on the market. If U.S. companies shed another 1.5 million jobs in 2009, the supply of vacant office space may push the vacancy rate to 20%.