The office market registered negative net absorption for the second consecutive quarter but recorded its third consecutive quarter with over 100 million SF in leasing volume. There is currently a record-high amount of sublease space available on the market, placing further downward pressure on asking rents. Uncertainty continues to cloud the market as organizations big and small consider the role of the physical workplace in their future. A national trend has yet to emerge, but one will be revealed as leases expire over the next several years.
National office real estate trends
- The pool of sublease space available is currently at a record-high 230 million SF, up almost 16% from Q4 2021
- Leasing volume has exceeded 100 million SF for the fourth consecutive quarter
- Landlords and owners are granting free rent and generous tenant improvement packages in lieu of lower rent
- New construction starts for office developments have slowed considerably: pre-pandemic construction starts averaged $24 million quarterly, while construction starts after the pandemic onset average $14 million quarterly
- Sales volume remains strong as investors seek well-leased buildings with creditworthy tenants (“trophy” assets)
- With the Federal Reserve raising the policy rate by 225 basis points since March, the threat of a recession is looming over business decisions
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If you’d like to learn more about the nation’s office real estate outlook, download the full report below. This report will give you full insight to the topics mentioned above along with a variety of other statistics to help you stay ahead of market trends.
