National CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
Report: U.S. Office Sector Continues to Struggle Toward Recovery
As the local weather conditions around much of the U.S. are typical of the unsettled, uncertain early days of spring, so it’s still early days in the recovery for U.S. office. Yardi’s CommercialEdge reports that the sector continues to struggle after the shock of the COVID-19 pandemic changed how office space was used as many firms shifted to remote work.
“The effects of this shift are still reverberating across the industry and causing increased vacancies, losses in office employment, lagging sales, and a forecasted decline in construction,” according to CommercialEdge.
In February, the national average full-service equivalent listing rate was down 0.6% year-over-year. Meanwhile, at $38.81 per square foot, listing rates also marked a $0.01 dip last month compared to January.
The national vacancy rate currently stands at 15% –a 160-basis point increase Y-O-Y and an uptick of 40 bps month-over-month. Highest vacancies currently are in Austin, San Francisco and Seattle, says CommercialEdge.
The effect of the pandemic on rising vacancies was most evident in CBD submarkets, “where typically high density is incompatible with social distancing requirements,” according to CommercialEdge. “As such, office space in urban cores saw the greatest increase in vacancies — up 250 bps Y-O-Y.”
- ◦Lease
