National Office Market
Average Asking Rent (Price/SF) |
$31.43 |
Vacancy Rate (%) |
17.6% |
Net Absorption (SF) |
-4,350,119 |
The United States office market fundamentals remained contractionary in the third quarter of 2022. Net absorption measured negative 4.4 million square feet (msf) in the third quarter of 2022, bringing year-to-date net absorption to negative 16.2 msf. Occupancy losses were similar in both major gateway and secondary markets, measuring quarterly net absorption of negative 2.2 msf and negative 2.0 msf, respectively. Tertiary markets, which represent only 3.8% of the nation’s total inventory, measured negative 0.1 msf of net absorption. The national vacancy rate increased by 114 basis points (bps) over the last year to 17.6%. Rising vacancy is a symptom of low demand, illustrated by persistent negative net absorption, and high supply, evidenced by an elevated construction pipeline. High quality assets continue to attract disproportionate demand, which may be encouraging new development enthusiasm even as the overall market continues to weaken. Top quality assets are best positioned to attract demand and are exhibiting relatively tighter fundamentals. Asking rents continue to appreciate at a modest but steady pace. Average asking rents increased by 1.9% over the past year, reaching $31.43/SF.