U.S. Office Market Recovery Slowed In February, Leasing Activity Dips
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Loading... - Alexander Klassen
- 01 Apr 2022
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According to CBRE's latest monthly Pulse of U.S. Office Demand Report, the U.S. office market recovery slowed for the second straight month in February, though the number of companies actively looking for new space indicates that leasing activity could pick up in the coming months.
Office-leasing activity slowed markedly in February as companies delayed decisions on long-term commitments, likely due at least in part to COVID-19's omicron variant. Meanwhile, two other metrics held steady: Sublease availability remained at nearly half its pre-crisis amount and activity by companies looking for new space stayed at an encouraging level.
"Uncertainty in the market from either the pandemic, inflation or geopolitical events can have a cooling effect on office-market activity," said Julie Whelan, CBRE Global Head of Occupier Research. "There is cause for optimism, though, that the sustained level of activity by companies seeking new office space will translate to more leasing activity in the months ahead."
To gauge the pace of recovery, CBRE's monthly report tracks the three leading indicators of office market activity in the largest 12 U.S. office markets: tenants-in-the-market (TIM), which quantifies the amount of office space that companies are actively seeking; leasing activity in the form of finalized lease agreements; and the availability of sublease space.
A national view of the indices outlines the scope and trajectory of the office market's recovery. For each index, a reading of 100 equates to the pre-pandemic levels of 2018 and 2019.
The February results of CBRE's three indices again show Boston leading the recovery among the 12 markets, owing to its strong TIM activity. The lineup of other markets showing progress in February offered few changes from the previous month; Dallas-Fort Worth, Los Angeles, Denver and Seattle led the others in recovery.
The U.S. TIM Index registered 89 in February, unchanged from a month earlier. Three markets have TIM readings above their pre-crisis levels: Houston (126), Boston (118) and Dallas-Fort Worth (116). Another three are within 10 points of reaching their pre-crisis levels: Manhattan (99), Denver (96) and Seattle (92). Of those six markets, only Denver saw a decline of its TIM reading in February. Read More…
