Bradford Allen released its Q2 2023 CBD Office Market and Mid-Year 2023 Suburban Office Market reports. Absorption in the CBD improved to 64,000 square feet in the second quarter, compared with negative 1.8 million square feet, with companies preferring newly developed and renovated space.

The Q2 2023 CBD office vacancy rate was 19.2%, unchanged from the first quarter. However, the leasing volume was just 1.3 million square feet, the lowest quarterly leasing activity since Q4 2020. Average gross asking rates slightly increased to over $44 per square foot from just under $43 per square foot in Q1 2023.

Meanwhile, suburban office asking rents were unchanged, at just below $27 per square foot, while the direct vacancy rate dropped from 28.3 to 26.9% in the second quarter. Most office sales in the suburbs this year have been vacant buildings poised for redevelopment, and more than a third of all office purchases are likely to be converted to alternate use.