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.
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.
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