National Vacancies

U.S. office market conditions from Q1 2015 to Q1 2018*

*Monthly chart cycles among office, industrial and retail. Source: CoStar Group Inc.

During the first quarter of 2017, office sector net absorption increased compared to the same quarter of 2016 only in the Midwest, with a gain of 16.2 percent. In all the other regions, net absorptions decreased, the most significant change being in the West (-30.2 percent), followed by the Northeast (-22.9 percent). Vacancy rates year-over-year decreased in all regions, with the largest change coming from the Midwest, from 9.9 percent in the first quarter of 2016 to 9.2 percent in the first quarter of 2017. Forecasts show that net absorption is expected to rise in the first quarter of 2018 only in the West region (23.5 percent) and is expected to decrease in the rest of the regions. The most significant decrease is expected to be in the Midwest, at approximately 33 percent. Vacancy rates for office markets are expected to decrease by 2.7 percent in the Midwest and remain almost the same as in the first quarter of this year for the other regions.