CHICAGO—Leasing activity in the US office market slowed down considerably in the fourth quarter, resulting in just 6.5 million square feet of net absorption, according to an analysis from JLL. Researchers at the Chicago-based firm put much of the blame on a lower number of leases larger than 500,000 square feet.
There were no leases of this size signed during the fourth quarter, and 2016 saw a 43% drop in these “mega leases.” However, JLL expects the overall office market to bounce back in 2017, and giant leases will probably play an important role.
“This was likely a short-term blip,” Scott Homa, director of US office research, JLL, tells GlobeSt.com. “I don't want to overstate the importance of the election,” but along with concerns about Brexit and other international worries, “it could have delayed the decision-making process.” As a result, several leases that ordinarily would have been signed got pushed into 2017. But since the “equity markets seem to have taken the election in stride, these deals which had been at the goal line will now move toward execution.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
