Office Fundamentals Remain Challenged, but the Outlook is Improving The U.S. office vacancy rate rose for the sixth consecutive quarter in Q2 2021. Net absorption remained in the red, but...
Office Fundamentals Remain Challenged, but the Outlook is Improving
- The U.S. office vacancy rate rose for the sixth consecutive quarter in Q2 2021.
- Net absorption remained in the red, but occupancy losses were significantly lower than the prior quarter’s worst total on record.
- While asking rents are mostly holding firm, concessions continue to rise.
- Sublease space is at an all-time high, but additions have slowed for three consecutive quarters.
- Supply-side risks are diminishing as construction activity continues to slow.
- Sales volume increased in Q2 2021 with buyers focusing on suburban assets.
- Tech-driven cities are set to see the strongest economic growth.
- Over three-quarters of office-using jobs lost due to the pandemic have been recovered.
- As the Delta variant spreads, expectations for the return to the office remain in flux.