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Markets See Job Growth, Absorption Discrepancy

WASHINGTON, DC-Delta Associates reports below average office absorption year to date, despite above average job growth.

By Erika Morphy | Updated on October 25, 2006

WASHINGTON, DC-A new report by Delta Associates points to a puzzling trend here as well as in other active real estate markets such as Chicago, New York, and Los Angeles: that is, the lighter-than-usual rate of office absorption in a active employment market.

“We are seeing it in markets such as Washington, Chicago, New York and Los Angeles, but not so much in the Sunbelt markets such as Houston,” Gregory H. Leisch, CEO of Delta Associates, tells GlobeSt.com. However, he adds, the discrepancy between the two metrics–which usually rise in tandem–is most pronounced in the DC market.

It finds that office demand has been light relative to job growth this year. “Since job growth typically translates into need for office space, the light demand experienced to date in 2006 has questions about the factors contributing to this apparent disconnect,” the report says.

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