Office absorption slowed down in the fourth quarter of 2017, according to the fourth quarter office report from Newmark Knight Frank. While absorption is positive, it fell over the previous quarter and the previous year to 231,144 square feet from in the previous quarter and 237,477 square feet in the fourth quarter of 2016. There has been a steady pattern of deceleration each year, according to the report. In 2014, there was a total of 3 million square feet of absorption. 2015 had a gain of 2.4 million square feet, 2016 recorded 2 million square feet, and 2017 posted 1.8 million square feet.

While the report shows steady deceleration, Steve Kolsky, an EP and managing director at Newmark Knight Frank, says that the numbers are deceptive. “I think that is a little bit misleading because those numbers are based on move-ins, not necessarily deals done,” Kolsky tells GlobeSt.com. “There were some pretty good deals that were done that are not yet reflected in those numbers. Tesla, for example did 130,000 square feet in Venice and Apple did 85,000 square feet in Culver City and neither of those are in the report.”

While he says that activity has been strong, he agrees that activity has slightly waned. However, that may be an effect of deal speed rather than demand. “I would say that there was a little bit of a slow down, but I think part of that was that it is taking longer for deals to get done these days,” he says. “In general, there is still a lot of velocity out there and deals in the market.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.