The vacancy rate for central business districts in the U.S. dropped to 14.2 percent from 14.5 percent in the previous three months and 15.2 percent in the year-earlier period, according to data provided by Cushman & Wakefield, a real estate services provider. Last quarter's vacancy rate was the lowest since the second quarter of 2002, when it was 14.1 percent.
Landlords are benefiting from companies adding office space as they create jobs or prepare to hire workers. The number of U.S. workers filing initial claims for unemployment benefits fell close to a five-year low last week.
"Firms are either starting to hire or they're anticipating hiring," said Maria Sicola, senior managing director of research services at Cushman.
The drop in vacancies helped spur rent rises in central business districts nationally. Washington CBD had the lowest office vacancy in the US, with the rate dropping to 7.5 percent from 8.5 percent a year earlier. Rents climbed 15 percent from a year earlier, compared with a 1 percent gain nationally.
The increase in occupancy and rents in Washington is being driven by government agencies leasing space as well as by law firms and professional-services companies doing work for or seeking contracts with the federal government, Sicola said.
The office vacancy rate in San Francisco dropped to 16.4 percent from 18.7 percent a year earlier and 17.4 percent in the previous three months. Rents in the city gained 2.6 percent. In West Los Angeles, the vacancy rate declined to 11.8 percent from 16.8 percent a year earlier, and rents rose 1.5 percent.
Chicago, Philadelphia and Atlanta all had rises in CBD vacancies, because of new and sublease space coming on the market, Sicola said. Chicago's rate rose to 18.1 percent from 15.8 percent a year earlier, Philadelphia's rate increased to 17 percent from 13.7 percent, and Atlanta's rate climbed to 22.6 percent from 18.8 percent.
