Office demand losses from last year have carried into the first half of 2021. While the current state of the market is somewhat concerning, some losses are expected to be offset as the nation returns to work and companies make future-forward real estate decisions.
National office real estate trends
- Absorption recorded its worst quarter on record as tenants downsize and adopt flexible work models.
- While leasing activity has remained subdued, subleasing activity has continued to set new records. The amount of sublease space available has risen to 200 million SF, up from 120 million SF at the start of 2020.
- New construction has slowed considerably, with tech hubs seeing the most activity.
- For the fourth consecutive quarter, the market experienced declining rental rates. Rental rates are expected to further decline based on the competition of sublet space, high vacancy rates, and subdued demand.
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Information contained in this report is provided, in part, from third-party sources, including Cresa, the U.S. Bureau of Labor Statistics, Real Capital Analytics, and CoStar Group. Even though obtained from sources deemed reliable, no warranty or representation, expressed or implied, is made as to the accuracy of the information herein.
