Offices could see stronger demand.

Position:Commercial
 
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The office market slowed slightly in early 2016. But as financial markets stabilized later in the first quarter, office-using job growth accelerated, which could signal stronger tenant demand to come, analysts said.

Employers added just 151,000 jobs in January compared with 242,000 in February and 215,000 in March, the Labor Department reported. In May the department said unemployment remained unchanged at 5.0 percent in April.

"With healthy office-using employment growth and limited new supply expected in 2016, rents will likely further increase," said Andrea Cross, Los Angeles-based CBRE Group's Americas head of office research. "However, we continue to keep a close eye on any impact from financial market volatility and global risk factors on office market fundamentals."

Victor Calanog, chief economist and senior vice president with Reis Inc., New York, called it "almost tempting to be very optimistic about the office sector." He noted that 52 of the top 82 markets posted occupancy improvements in the first quarter, while 75 of those markets posted effective rent increases.

"While the financial and commodity markets have gotten off to a jittery start in 2016, the economy remains solid," Calanog said. "Real GDP [gross domestic product] growth should continue to be good, if not great, and...

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