The national average full-service equivalent listing rate fell 24 cents in November 2020 to $37.76 per square foot, while national vacancy rate jumped to 14.2%
SANTA BARBARA, Calif., Feb. 3, 2021 – As expected, stress for the office sector continued in late 2020, reports CommercialEdge. The national average full-service equivalent listing rate fell 24 cents in November 2020 from the previous month to $37.76 per square foot, a decrease of 1.0% year-over-year. The national office vacancy rate increased 40 basis points to 14.2%.
Affecting these trends is office-using employment, which was down 3.4% year-over-year in December. Metro data shows 104 of the 120 markets covered by CommercialEdge have been negative since last November. Tech hub and relocation magnet Austin is the exception, with a remarkable 6.4% increase in office-using employment in the last 12 months.
Rollout of the COVID-19 vaccine is progressing slowly, signaling that any return to workplace normalcy won’t occur until well into the second half of the year. Even though the vaccine provides optimism that companies can eventually return to offices, many firms have been reevaluating exactly how much office space is needed and if some workers can stay remote permanently.
“As the companies continue to reevaluate their office footprints in a post-pandemic world, one trend worth watching is office conversions into multifamily,” states the report. “If governments can properly align the incentives for office owners to undertake conversions, then this solution could solve two problems at once by giving office owners holding onto vacant space a viable exit while increasing the stock of affordable housing.”
Find greater details in the full January office market report from CommercialEdge.
CommercialEdge provides extensive property data that includes transaction, ownership and debt information, offering nationwide coverage across all commercial real estate asset types. Use the platform to uncover vital market data and get insights with the latest lease and sale listings.
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