National Office Market
Average Asking Rent (Price/SF) |
$31.05 |
Vacancy Rate (%) |
16.9% |
Net Absorption (SF) |
-3,465,044 |
Recovery of the United States office market fundamentals softened in the first quarter of 2022. Net absorption tipped further negative, causing a slight acceleration in vacancy growth from fourth-quarter 2021. The momentum of office recovery was not consistent throughout the quarter. The rapid spread of the Omicron variant in January stunted some market activity early in the quarter, but public health conditions improved rapidly and have positioned most office markets for growth in the coming quarters. Net absorption measured negative 3.5 million square feet in the first quarter of 2022. The national vacancy rate has increased by 117 basis points over the last year to 16.9%. Vacancy has ticked upward during the pandemic due in part to occupancy losses, but also due to the nation’s steady pipeline of deliveries. Over 9.1 million square feet delivered in the first quarter of 2022 and the national construction pipeline held relatively stable at 74.2 million square feet. Asking rents continue to appreciate, though at a slowing rate. Average asking rents rose 1.5% over the past year, reaching $31.05/SF. Net effective rents have been under consistent downward pressure due to generous concession packages in most major markets, aimed at attracting and retaining tenancy.