Office-using employment expanded by 125,500 jobs in Q3—the highest quarterly total so far in 2016 and the 27th consecutive quarter of increased growth. Office-using employment is now 8.3% above its pre-recession peak.
Net absorption slowed to 7.1 million sq. ft. in Q3 from 13.3 million sq. ft. one year earlier, primarily due to 1.7 million sq. ft. of negative absorption in the downtown markets.
The vacancy rate was flat at 13.0% in Q3 2016, the 25th consecutive quarter in which it decreased or was unchanged. The suburban vacancy rate also was unchanged at 14.3%, while the downtown vacancy rate increased for the third straight quarter to 10.7%.
Construction completions reached the third-highest total of the current cycle at 10.7 million sq. ft. in Q3 2016.
The overall gross asking rent increased by 6.3% year-over-year to $31.33 per sq. ft., slightly more than the Q2 2016 annual increase. Rents increased in 82% of the downtown markets and 88% of the suburban markets tracked by CBRE Research.
At $34 billion, Q3 2016 office investment was strong, but fell short of the year-earlier level by 3.7%. For individual asset acquisitions—the best benchmark for investment momentum—the decline was smaller at -2%. Year-to-date, individual asset acquisitions increased by 1.5%—the slowest year-over-year growth rate for the Q3 year-to-date period since 2009.