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“Flight to Quality” Plays Out in Office Rent Performance

The “flight to quality” is in full force in 12 major U.S. office markets as occupiers adapt their spaces for hybrid work, CBRE reports. The trend is illustrated by rent growth performance: average effective rents for top-tier properties increased by 3.8% in 2021 and by 6.7% year-to-date. 

At the same time, average effective rents for lower-tier properties declined by 3.4% last year and by 1.1% so far in 2022. 

“This data represents just one of many ways of assessing the flight-to-quality phenomenon, but it does provide a simplified, clear view for consideration,” said CBRE’s Mike Watts, president of Americas investor leasing.  

“The data underscores that companies are investing more in their offices and owners are investing more in their buildings to get into the top tier and stay in it. Owners in lower tiers may need to get more aggressive in their pricing and concessions to generate sustained leasing velocity.” 


Inside The Story

CBRE's Watts

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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