<body><div><figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=12759b_1EAM7qYY00" alt="https://img.particlenews.com/image.php?url=12759b_1EAM7qYY00" width="1280" height="853" ><figcaption>Second-quarter office market reports indicate no new office construction is underway while demand for Class A space remains high. Business Record file photo</figcaption></figure>There could be demand for speculative office development as no new office projects are under construction and vacancy among Class A space tightens while demand for newer space and higher-level amenities grows, according to brokerage firms’ second quarter market reports.The Business Record reviewed office market reports from JLL, CBRE and Colliers. All reported the continuing trend of companies moving to Class A space.“This high demand is depleting the available inventory of top-tier space, creating a strong case for new speculative office construction,” the JLL report said.CBRE reported that office construction is moving from the pipeline phase to a delivered product. “The combination of strong year-to-date absorption, declining vacancy, and elevated asking rates indicates a market where existing space is increasingly in use and new supply has recently been added but no additional projects are currently underway,” the CBRE report said.According to Colliers, there remains a divide between “competitive, well-positioned assets and older, second-generation space.”“While no new office construction is underway, vacancy remains elevated in the market’s largest office nodes, particularly the Western Suburbs at 18.2% and the CBD at 16.8%,” Colliers’ report said.Colliers also reported negative net absorption in the second quarter, driven primarily by negative absorption in Class B space.According to the Colliers report, Class B space recorded more than 109,000 square feet of negative absorption, while Class A space posted more than 70,000 square feet of positive absorption.“Q2 activity underscores the uneven nature of current office performance,” the Colliers report said. “Occupancy gains from larger move-ins and select suburban assets were outweighed by continued churn in older and more challenged buildings, particularly within CBD Class B inventory.”Here are highlights from each brokerage firm’s report:<ul><li>Total vacancy – 15.3%</li><li>YTD net absorption – 283,051 square feet</li><li>Class A asking rent – $26.50 per square foot</li><li>Overall asking rent – $22.05 per square foot</li></ul><ul><li>Vacancy – 13.6%</li><li>Net absorption – 86,000 square feet in Q2</li><li>Lease rate – $20.66</li></ul><ul><li>Vacancy – 16.3%</li><li>Net absorption – (-52,969 square feet)</li><li>Lease rate – $21.83 per square foot</li></ul></div></body>

Block Source: Des Moines Business Record

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There could be demand for speculative office development as no new office projects are under construction and vacancy among Class A space tightens while demand for newer space and higher-level amenities grows, according to brokerage firms’ second quarter market reports. The Business Record reviewed office market reports from JLL,...

Speculative office development talks could come as Class A office space tightens

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There could be demand for speculative office development as no new office projects are under construction and vacancy among Class A space tightens while de

Speculative office development talks could come as Class A office space tightens

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