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Office vacancy rates in U.S. unchanged amid sluggish job growth

People attend a job training and resource fair at Coney Island in New York December 11, 2013. REUTERS/Eric Thayer
People attend a job training and resource fair at Coney Island in New York December 11, 2013. REUTERS/Eric Thayer

By Michelle Conlin

(Reuters) - Office vacancy rates in the United States remained unchanged for the fourth quarter of 2013 because lackluster job growth and concerns about the economy muted demand for office space, a preliminary report by real estate research firm Reis Inc said.

The national vacancy rate during the quarter was 16.9 percent, similar to the levels Reis has observed over the past three years.

"With most of the employment growth continuing to come from low-paying, low-skilled jobs that don't utilize office space, demand remains weak," the report said.

The vacancy rate is down from a post-recession high of 17.6 percent in late 2010, but it is still well above the 12.5 percent average rate recorded in the third quarter of 2007.

The high vacancy rates continued to pressure rents, which were up an average 0.7 percent from the prior quarter.

"Landlords remain unable to drive asking rents upward or pull back on lease concessions," the report said.

New York reclaimed the title of tightest market - from Washington, D.C. - with a vacancy rate of 9.9 percent at the end of the fourth quarter. Washington fell to second place at 10.3 percent.

Reis said its outlook for 2014 was for moderate improvement versus 2013, but it emphasized that until there is growth in high-wage, high-skill jobs the need for office space will not accelerate.

(Reporting By Michelle Conlin; Editing by Grant McCool)

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