Nationally, the office market appears to be stagnant; however unique geographic trends are emerging. Data from JLL shows a concerning national trends in the office market, from a decline in occupancy to an increase in sublease space. However, recent data from REIS Moody’s Analytics has found that individual markets reveal emerging trends in market activity.

According to JLL, the dramatic decline in office activity during the second quarter sparked third quarter volatility. Many firms are choosing to stay in place and wait out the uncertainty, and firms with lease renewals are using three-to-five year lease extension options. As a result, 55% of national leasing came from renewals in the third quarter. An increase in givebacks have also led to a 28.9 million-square-foot decrease in occupancy. This is the largest single-drop in a quarter on record, and it brought the vacancy rate to 16%. Unsurprisingly, this has also led to an  excess of sublease space. The market is now larger than it was during the dot-com era, and JLL expects the market to reach 150 million square feet.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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