National Office Market
Average Asking Rent (Price/SF) |
$31.09 |
Vacancy Rate (%) |
17.4% |
Net Absorption (SF) |
-12,760,931 |
The United States office market experienced softening in the second quarter of 2022. Net absorption contracted for the second consecutive quarter, resulting in accelerated vacancy growth. For much of the last two years, office market fundamentals have followed the pace of public health recovery; however, despite the significantly improved conditions and elimination of pandemic-related restrictions, office market recovery momentum slowed. Net absorption measured negative 12.8 million square feet in the second quarter of 2022, as mid-year net absorption tallied negative 16.1 million square feet. The national vacancy rate increased by 122 basis points over the last year to 17.4%. Upward pressure on vacancy can be attributed to occupancy losses and inventory expansion. Quarterly construction deliveries slowed in 2022, yet the total construction pipeline remains relatively strong. About 10.5 million square feet delivered nationally in the second quarter of 2022, and the construction pipeline held steady at 75.8 million square feet. Asking rents continue to appreciate, though at a slowing rate. Average asking rents rose 1.9% over the past year, reaching $31.09/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.