SANTA ANA, CA--Bob Bach (top right photo), senior vice president and chief economist at Grubb & Ellis Co. notes in his regular market updates, the U.S. office vacancy rate ended 2008 at 14.8 percent, an increase of 50 basis points in the fourth quarter and 180 basis points since year-end 2007.As softening cycles go, this one has been moderate so far; during the opening four quarters of the prior softening cycle, the vacancy rate shot up by 450 basis points (2000-Q3 to 2001-Q3).
(Fourth quarter 2008 Vacancy Chart below)
The more muted response this time is all the more surprising because the labor market shed a relatively shallow 1.5 million payroll jobs during and after the 2001 recession, while it has already lost 2.6 million jobs since the current recession began in December 2007, with 1.9 million of those coming in the last four months of 2008.
Because the office market lags changes in employment, the market is expected to register steeper vacancy increases in 2009 in response to the sharp deterioration in the labor market late last year.
For more information or to speak with Bob Bach, please contact Janice McDill at 312.698.6707.
The more muted response this time is all the more surprising because the labor market shed a relatively shallow 1.5 million payroll jobs during and after the 2001 recession, while it has already lost 2.6 million jobs since the current recession began in December 2007, with 1.9 million of those coming in the last four months of 2008.
Because the office market lags changes in employment, the market is expected to register steeper vacancy increases in 2009 in response to the sharp deterioration in the labor market late last year.
For more information or to speak with Bob Bach, please contact Janice McDill at 312.698.6707.
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