US Office Markets Waiting on a Train

US Office Markets Waiting on a Train

According to its 2010 US National Economic and Property Market Forecast, the US office market still trails the overall economy and as a lagging indicator, the economic recovery train's caboose won't be pulling into the station until sometime in the second half of 2010. Before that happens, Jones Lang LaSalle's research experts see overall employment losses finally bottoming out in mid 2010 but leasing demand is likely to remain stagnant through next year and office market vacancies will near 20 percent by late 2010. One factor to watch when job growth does turn positive -- this won't immediately result in renewed space demands by corporate occupiers. The reason -- Jones Lang LaSalle estimates that 7-8 percent of the space available nationally is "shadow space" meaning that corporate users are simply banking that square footage for anticipated future expansion. Among the good news expected next year: a rebirth (in more conservative form) of the CMBS market and up to a 50 percent increase in property transaction volume.