Class A buildings are driving office absorption in many parts of the United States, particularly in the Sun Belt, and are helping stabilize the sector in the wake of COVID-19, according to the newest NAIOP Office Space Demand Forecast published by the NAIOP Research Foundation.
Office vacancy rates continued to tick up for the tenth straight quarter, but NAIOP analysts posit that the completion of new buildings may be partly to blame. The organization projects that absorption of that space will continue to be positive.
Overall net office space absorption in the last three quarters of this year is predicted to clock in just shy of 47 million square feet, a figure that's basically unchanged from previous forecasts. Total net absorption in 2023 is forecast to be 47.3 million square feet, with an additional 6.5 million square feet absorbed in the first quarter of 2024.
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