U.S. office vacancy rate flat in second quarter: Reis

Morning commuters walk through a steam cloud on Wall St. during a morning snow fall in New York's financial district

(Reuters) – U.S. office vacancy rate was flat at 16 percent in the second quarter of 2017, compared with the preceding quarter, according to real estate research firm Reis Inc <REIS.O>.

Asking rent and effective rent both rose 1.6 percent in the second quarter from the same period a year earlier. This is the lowest annual rate of rent growth since 2011.

“We expect stronger construction in 2017 than in 2016 which means that the vacancy rate could continue to stay flat as occupancy grows at or near the same pace as new completions just as it has over the last two years,” Barbara Denham, senior economist at Reis, said.

Net absorption, which is measured in terms of available office space sold in the market during a certain time period, nearly halved to 3.33 million square feet, the lowest since the second quarter of 2014.

Construction activity slowed, with 7.55 million square feet of new office construction completed in the quarter, compared with 9.52 million square feet in the first quarter.

(Reporting by Arunima Banerjee in Bengaluru; Edited by Martina D’Couto)