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 matrix@yardi.com, 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.