“Overall for the office market in terms of demand, it’s a pretty good story,” said Hans Nordby, managing director of Property and Portfolio Research (PPR), CoStar’s analytics and forecasting division. Nordby was joined by Walter Page, PPR director of research; and Jay Spivey, CoStar senior director of research and analytics.
Although office job growth slowed on a year-over-year basis to 1.9% from last quarter’s 2.8%, it’s still growing at a much stronger rate than the broader U.S. economy, which remains a nagging source of concern to economists.
Office job growth is the life’s blood of real estate fundamentals. And those fundamentals are starting to pick up momentum, with net absorption of U.S. office space more than doubling from 8 million square feet in the first quarter to 18 million square feet in the second quarter of 2012. Despite the surge in absorption “it’s still not a screamer of a quarter” compared to the boom years of 2005 and 2006, Nordby noted.