Q1 2022 U.S. office market overview
Inventory
With the addition of roughly 60 MSF to existing supply over the last 12 months, tech heavy markets and Sunbelt markets have been the largest drivers of new deliveries. As well, both tech and Sunbelt markets are leading current construction underway.
Net absorption
With leasing activity continuing its positive trend, net absorption as a percentage of inventory turns positive. While the office market is showing signs of recovery, leasing fundamentals have yet to recover to pre-pandemic levels. Sublet space has begun to decline, yet still hovers close to an all time high.
Direct asking rent
Asking rates - which bottomed in early 2021 - have been on a steady albeit only slight increase. Given this dynamic, year over year rates have remained almost flat. Until sublease space begins to appreciably decline, direct rents will be slow to return to pre-pandemic rates.
Availabilities
Sublet space, although now beginning to decline slightly over the past few quarters, is still weighing heavy on fundamentals. Sublet space remains near an all time high yet is also attracting tenants seeking better terms for shorter periods. This dynamic is creating more flexible opportunities for tenants.
Vacancy
Vacancy remained relatively flat when compared to year end 2021 yet has been on a steady increase since the start of the pandemic. As supply continues to comes online, large blocks of space remain unfilled, and sublease space remain abundant – vacancy is predicted to remain elevated.
Investment sales
Office investment sales volume picked up dramatically in the second half of 2021 and through Q1 2022, despite ongoing uncertainties related to return to office. As inflation remains high, commercial real estate is well positioned to attract continued investment as investors hedge risk.
Local 2022 Q1 office market reports
Get office market trends, data and insights for your commercial real estate market.
- Atlanta
- Austin
- Boston
- Charleston
- Charlotte NC
- Chicago (Downtown)
- Chicago (Suburban)
- Dallas
- Denver
- Detroit
- Fairfield-Westchester
- Fort Lauderdale
- Greenville
- Houston
- Indianapolis
- Jacksonville
- Las Vegas
- Long Island
- Los Angeles
- Miami
- Minneapolis
- Nashville
- New Jersey
- Manhattan
- Oakland
- Orange County
- Orlando
- Philadelphia
- Phoenix
- Pittsburgh
- Raleigh-Durham
- Sacramento
- San Francisco
- San Jose Silicon Valley
- Tampa
- Washington DC (Northern Virginia)
- Washington DC (Downtown)
- Washington DC (Suburban Maryland)
- West Palm Beach
Additional thought capital from Avison Young
Is real estate an inflation hedge?
Although the global economy has experienced a robust rebound in a recovery era, fears remain around a period of higher inflation and interest rates. Does real estate possess inflation-hedging properties?
Our experts explore the economic outlook and whether real estate really does possess inflation-hedging properties.
U.S. employment overview: tracking trends in real-time
The two sides of the U.S. employment situation were on full display in the October jobs report. While 194,000 new jobs were added, the labor force shrank by 183,000. The unprecedented level of job turnover continues to challenge employers who are responding with rapid wage growth.
READ MORE
Office Vitality Index
The Vitality Index offers owners and occupiers a dynamic look at recovery trends and daily foot traffic estimates in 20+ different metros across North America. It allows easy, real-time access to comparisons to pre-pandemic levels. Share this with clients and prospects to help guide them through these uncertain times.
View Office Vitality Index