Office and Industrial Sectors Enjoyed Q3 Growth

The office and industrial sectors within the commercial real estate world experienced vibrant activity, according to new Q3 data issued by Cushman & Wakefield.

Demand for office space in the third quarter cooled down somewhat, with 17.3 million square feet (msf) of space absorbed in the third quarter, down 10 percent from the previous quarter. However, demand was still strong, with vacancy rates falling to 14.2 percent from 14.4 percent in the second quarter.

While this occurred, construction for new commercial property was on the rise, with 95.1 msf of new office space was being built at the end of September. The weighted average rental growth rate posting a 4.7 percent year-over-year increase, and approximately 90 percent of all U.S. markets experienced positive rental office growth, with nearly half experiencing growth above the five-percent mark.

In the industrial sector, Cushman & Wakefield Net recorded absorption of 57.9 msf during the third quarter, with the year-to-date occupancy gain in industrial properties coming in at 173.1 msf. About 70 percent of all markets experienced positive rental grown, with 45 percent enjoying year-over-year growth above five percent. The nationwide average vacancy rate for this sector was 7.4 percent, and 182.3 msf of construction was underway by the end of September.