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U.S. Office Market Yet to Feel Full Impact of COVID-19, Says Yardi Matrix

Listing rates held steady and vacancies fell in
March, but the full effect on the sector is still unclear

SANTA BARBARA, Calif.,
April 28, 2020 – The fallout
from the COVID-19 pandemic has yet to majorly impact the U.S. office market,
according to data compiled by Yardi Matrix® for March 2020.

National
full-service equivalent listing rates held, steady with an average of $37.99
per square foot, a 0.2% increase over March of last year, and vacancy rates
fell 60 basis points from February to 12.8%, according to the latest Yardi Matrix office report.

With stay-at-home
orders and social distance regulations hampering employment, sales and business
performance nationwide, things are likely to shift significantly in the coming
months. Complete job loss data has yet to be fully reflected in the current
report, due to Bureau of Labor Statistics reporting time frames.

“On the national
employment front, jobs in sectors classified as office-using employment only
suffered a 0.2% decline in March, but the worst is surely to come,” states the
report summary.

At the end of
March, 148.9 million square feet of office space was under construction
nationally, a number that will likely decline in the coming months as investors
and owners pull back spending. Extensions on 1031 exchanges could also have an
impact on the transaction market.

Download the full Yardi Matrix March office
report.

Yardi Matrix will
host a second webinar on the impact of the COVID-19 crisis on the U.S.
commercial real estate market on Wednesday, May 13. Register for the webinar here.

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.