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Office rents edge higher – for the first time in a while

The average office rent in the U.S. edged slightly higher at the end of 2010 – to an average of $22.09 per square foot. That’s an increase of only 0.2 percent, but it’s the first increase in almost three years, which suggests that the long slump in rental rates may be coming to an end as the economy slowly improves. Back in early 2008, the national average was above $25 per square foot.

The total amount of leased office space in the U.S. has also slightly increased. From the beginning of 2008 through September 2010, the total amount of leased office space in the U.S. fell an astonishing 137.8 million square feet. In the last three months of 2010, though, the figure increased by 2.5 million square feet –not much, but a clear change in direction.

The average vacancy rate is 17.6 percent, and is the highest since 1993. The situation varies greatly from market to market, according to Reis, Inc., a company that compiles these figures. Some markets are coming back strongly, while more overbuilt areas such as Phoenix and Las Vegas are still seeing low rents and high vacancies.

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