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US Businesses Using More Office Space as Asian Market Falters

A new report shows businesses are occupying more office space as the economy s

As the U.S. economy slogs toward recovery, one metric of improvement has slowly started to rise: The rate of absorption of office space across the country inched upward in the second quarter, according to a report from commercial real estate provider Cassidy Turley.

The overall vacancy rate for U.S. offices fell by 10 basis points to end the second quarter at roughly 15.8 percent as businesses occupied an additional 11.1 million square feet, up from 7.8 million in the first quarter. At the same time, new office construction hit 39 million square feet. While these numbers may sound impressively large to a layman's ears, the new construction figures are actually down about two-thirds from normal levels.

"The office sector is simply mirroring the slow trajectory of the economic recovery," said Kevin Thorpe, chief economist at Cassidy Turley. "It's far from robust, but given the pullback from the construction industry, even minimal demand is enough to drive vacancy down."

U.S. rent prices experienced a slight bump, rising 5 cents to $21.70 per square foot per month. Meanwhile, across Asia, demand for office spaces has been falling. Overall demand fell across the subcontinent, according to The Economic Times of India, while the Asia Property Report indicated office rent in Singapore fell to between $7.43 and $7.55 per square foot per month.