US office market insights for Q4 2021: Data at a glance

The pandemic has continued to influence office occupier and capital markets conditions. Have some markets begun to recover more quickly than others? Explore this critical Q4 2021 office market data, powered by AVANT by Avison Young, by scrolling below.

Jump to: US office vacancy rates | Availability rates | Absorption | Base rents | Free rent periods | Tenant improvement allowances | Asset pricing | Investment dollar volume | Local US office market reports

US office supply and demand

Return-to-office efforts in mid-December—a leading indicator for office leasing demand—were down 69.6% versus the same week in 2019. New mutations of the coronavirus are further complicating employers’ workplace strategies, causing several companies to reassess their office plans. The goalpost to return to work could be moving from January 2022 to a later date.

Tepid leasing velocity and rising availabilities have caused a supply-and-demand imbalance that largely favors tenants. Absorption as a percentage of inventory has decreased in five out of seven U.S. gateway cities year-over-year, with all seven cities reporting negative absorption in 2021. Vacancy rates average 16.7% and availability rates average 22.0% across these major cities in the fourth quarter, which is high by their respective historical standards. 

What are current US office sublease and direct vacancy rates?


What are current sublease and direct availability rates?


How has net absorption as a percentage of inventory changed since the pandemic?


US office pricing: Average rents per square foot and more

Rents have not meaningfully changed since 2019, considering the headwinds facing many landlords in the post-pandemic environment. However, concessions have accelerated, with tenant improvement allowances increasing by an average of 19.0% and free rent periods increasing by an average of 21.0%, as landlords offer them to induce tenants to make long-term commitments. Trophy and Class A properties have captured an outsized share of demand in some markets such as Manhattan, upholding base rents near pre-COVID levels. 

How have base rents psf changed since the pandemic?


How have free rent periods in months, normalized to 10-year lease terms, changed since the pandemic?


How have tenant improvement allowances psf changed since the pandemic?


US office capital markets conditions

The capital markets remain flush with liquidity, marked by record levels of dry powder, though office transaction volumes remained comparable with 2020 levels across these seven U.S. cities in part due to prevailing occupier market uncertainties. Total dollar volume was $25.0B in 2021 and $25.8B in 2020.

How has asset pricing psf changed since the pandemic?


How have investment dollar volumes changed since the pandemic?


Local 2021 Q4 office market reports

Get office market trends, data and insights for your commercial real estate market.

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