North American Office Markets Rebound

Both the U.S. and Canada surmounted the effects of “frozenomics” in the second quarter of 2014, according to Colliers International’s latest “North America Highlights: Frozenomics Thaw Unfreezes Office Market in Q2,” by Andrea Cross. Projected continuing job growth and rising business confidence levels, the report notes, bode well for office demand through the rest of the year.

“The U.S. economic recovery is broadening: half of the metro areas tracked by Colliers have recovered all of the office-using jobs lost during the recession, including hard-hit markets like Atlanta, Miami and Jacksonville,” the report adds. “Continuing the trend of recent quarters, the overall U.S. vacancy rate decreased by 21 basis points to 13.72% in Q2 2014 and the overall Canadian vacancy rate increased by 52 basis points to 8.52%.”

“North American absorption totaled about 16.9 million square feet in Q2 2014, up from 15.3 million square feet in Q1 2014,” the report continues. “The U.S. posted just under 17 million square feet of positive absorption, compared with 83,530 square feet of negative absorption in Canada. Construction activity continued to increase in both countries, but at a faster pace in the U.S. At mid-year, 101.8 million square feet were under construction in the U.S. and Canadian markets tracked by Colliers, up from 92.1 million square feet at the end of Q1 2014 and 75.7 million square feet one year earlier.”

Colliers also notes that owners of office buildings in both the U.S. and Canada are repositioning existing structures to make them more competitive with newer ones and are focusing on attracting the creative, technology and media tenants “that have been the greatest source of current office demand in many markets.”


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