JLL’s 2016 Real Estate Trends Report

Topic:  • By Origin Investments • April 20, 2016 Views

Jones Lang LaSalle’s Q1 2016  U.S. Office Outlook report predicts occupancy growth rates will continue well into next year, driven by U.S. employment rates, which are at their highest level ever recorded.

Despite the unstable stock market and a weakened China, the JLL report says that U.S. rental rates are increasing at a steady clip, creating a landlord-favorable environment expected to last through 2016, as companies strive to accommodate their growing workforce and  “changing workplace preferences.” Meanwhile, leasing continues to be dominated by financial service and technology firms.

Dallas and Atlanta, two of Origin’s target cities for real estate investment, are considered “economic powerhouses.” They’ve added a combined 189,300 jobs in the past 12 months. Five of Origin’s eight target cities are considered high-growth markets that are holding steady market gains in terms of job growth.

JLL: Office Outlook

Here’s a snapshot of market conditions in Origin Investments’ target cities, according to the JLL report:

Atlanta – Positive demand with limited supply have created strong market conditions in the southeastern capital city

Austin – With more properties coming to market, investors will have more opportunities to choose from.

Charlotte – Developers are active, with just under 2 million square feet of development under way in the CBD, and rental rates are rising.

Chicago – In the CBD, strong leasing activity from 2015 carried into 2016. Activity in the East Loop, especially, surprised some observers and more growth is expected. In the suburbs, leasing activity remains strong.

Dallas –  New construction is beginning to outpace absorption, causing vacancies to rise, but corporate relocations are driving office demand.

Denver – The city’s economy remains strong: Hiring is up 15% for the past five years, and in January alone Denver had the lowest unemployment rate of all U.S. metros.

Houston – The city faces a challenging year due to depressed oil prices and job losses. Class A building owners interested in selling are waiting out the market.

Raleigh-Durham – Developers are catching up with tenant demand, and more than 1.5 million square feet is currently under construction.

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