Nationwide office fundamentals were strong in Q2 despite a marked slowdown in new job gains and a wave of new deliveries that came online during the quarter. “Even eight years into the cycle, office-using job creation remains healthy and solid in most markets. … However, we have blown past full employment in certain cities, which means job growth is going to slow in certain spots and accelerate in others as businesses broaden their search for talent,” Cushman & Wakefield Chief Economist Kevin Thorpe said in a statement. “This trend is becoming quite clear when we study this quarter’s office metrics. Secondary markets have a bit more labor slack and are now mostly powering the country’s absorption figures.”
National office absorption increased by 12.8M SF in Q2, according to Cushman & Wakefield. By that account, absorption — which is the net change in occupied space — rose 6.3M SF quarter-to-quarter, the highest jump since Q3 2016. Of the 85 markets tracked by C&W, 66 reported positive net absorption in Q2, while the other 19 reported declines. JLL reports positive net absorption was led by tech and co-working tenants, with Seattle leading every market in year-to-date net absorption of 2.9M SF.