Office Market Unevenly Impacted by COVID-19, Reports Yardi Matrix

COVID-19
has disrupted nearly every aspect of life in the U.S., but it has yet to show
up universally across the commercial office industry

SANTA BARBARA, Calif.,
June 25, 2020 –  Office-using employment has fallen substantially,
the planned new-supply pipeline has started to shrink and transaction volume
has slowed, according to Yardi Matrix® May commercial office data. However, listing rates have not displayed any
significant decreases and completions look much as they did at this point in
2019. In short, it’s still hard to tell what long term consequences the
commercial office market may suffer as a result of COVID-19.

Average
full-service equivalent listing rates fell 0.7% year-over-year to $38.15 per
square foot in May, with the pandemic having no major impact to date on office
listing rates according to the latest Yardi Matrix office report. $38.15 per square foot is up 26 cents from
April but down 0.7% from May of 2019.

As of yet, Yardi Matrix
has not seen a pullback on office space under construction. However, planned
projects have begun to soften. “We expect the number of planned projects to
continue to decline for the foreseeable future as developers wait to see what
the long-term impacts of the pandemic will be on the demand for office space,” states
the report.

May’s employment
report included a slight bump from the historic 2.7 million job losses
witnessed in April and employment in office-using sectors followed the trend. Only
one market in the entire country, Austin, saw positive job growth for office-using
employment in April.

Yardi Matrix has logged just $4.4 billion of transactions
in the second quarter as sales have slowed to a trickle. By contrast, $21.5
billion in sales occurred in the first quarter of 2020.

Download the latest full Yardi Matrix office
report.

Yardi Matrix offers the industry’s
most comprehensive market intelligence tool for investment professionals, equity
investors, lenders and property managers who underwrite and manage investments
in commercial real estate. Yardi Matrix covers multifamily, student housing, industrial,
office and self storage property types. Email [email protected], call (480) 663-1149 or visit yardimatrix.com to learn more.

About Yardi

Yardi^® develops and
supports industry-leading investment and property management software for all
types and sizes of real estate companies. Established in 1984, Yardi is based
in Santa Barbara, Calif., and serves clients worldwide. For more information on
how Yardi is Energized for Tomorrow, visit yardi.com.