Class A Office Market Lighting Class B Space

[IMGCAP(1)]HOUSTON-Higher rates for class A office space combined with increased demand and a shrinking amount of large contiguous blocks are having an impact on the class B market. In the past year, vacancy has dropped 8% among class B buildings, a trend that’s predicted to continue.

According to Grubb & Ellis Co.’s third-quarter report, there is seven million sf of empty class A space in its 77.3-million-sf inventory and 9.7 million sf vacant in the 64.4 million sf of class B space. Looking at it from an occupancy perspective, class A is 90.9% filled and class B, 85%. Class A rent averages $29.13 per sf and class B, $19.51 per sf. The report puts spec construction at 4.3 million sf.