July 7 (Bloomberg) -- U.S. office vacancies rose to the highest in four years in the second quarter as job losses mounted and demand for space declined, Reis Inc. said.

The vacancy rate increased to 15.9 percent from 13.2 percent a year earlier, the New York-based research firm said today in a statement. Vacancies hit 16 percent in the first quarter of 2005 and were at 15.2 percent in the first quarter of this year, according to Reis.

“Office properties are still facing extreme pressure in a troubled leasing environment,” said Victor Calanog, director of research at Reis.

The highest jobless rate in 26 years eroded demand for commercial leases as companies cut payrolls and retail spending declined. A government report last week showed U.S. payrolls fell more than forecast in June and the unemployment rate jumped to the highest level since 1983, reinforcing the threat to consumer spending, the biggest part of the economy.

Demand for offices slid for a sixth consecutive quarter, with a net decrease in occupied space of 20 million square feet. Occupied space fell by a net 45.2 million square feet this year. Reis estimates that will grow to 67.6 million feet by the end of the year.

Landlords’ asking rents fell 1.4 percent to an average $28.43 per square foot. Actual rents paid by tenants dropped 2.7 percent, a sign that landlords are continuing to offer concessions such as one or more months of free rent, Reis said.

Actual rents, also known as effective rents, were down 6.7 percent from a year earlier, according to Reis.

Washington had the lowest office vacancy rate at 10 percent in the second quarter, followed by Birmingham, Alabama, New York City and Nashville, Tennessee, Reis said. Sacramento, California, had the biggest increase in office vacancies from the first quarter, Reis said.

To contact the reporter on this story: Hui-yong Yu in Seattle at hyu@bloomberg.net

Last Updated: July 7, 2009 00:01 EDT