US office market reports Q3 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 Q3 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

Office occupiers are still grappling with their long-term space needs partly because fall return-to-work efforts did not meet expectations, keeping supply risk elevated amidst slowed demand. San Francisco-based tech companies have adopted remote work strategies and resultantly shed excess office space, causing a significant decrease in net absorption (-8.2% of existing inventory from 2020 to Q3 2021) that partially offset the positive absorption reported in nine out of 10 preceding years.

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

Landlords have induced long-term tenant commitments through more generous concessions packages since 2019. Washington, DC landlords have willingly offered significantly higher concessions packages, with tenant improvement allowances +18.0% and free rent periods +38.5% since 2019. Base rents, however, have predominantly remained near 2019 levels in most markets due to the ‘flight-to-quality’ trend and landlords’ reluctance to shift market pricing, among other factors.

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

Asset pricing trended downward and investment activity continued to lag amidst challenging occupier market conditions, despite ample uncommitted capital. Total pro-rata investment dollar volume is -37.0% from 2019 to 2021 across these major U.S. cities.

How has asset pricing psf changed since the pandemic?

 

How have investment dollar volumes changed since the pandemic?

 

Local 2021 Q3 office market reports

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