Office Vacancies Are High But Investors Don’t Seem To Care

Vacancies for office properties in the top 50 markets across the US hit an eye-popping 16% in April, but investors are still bullish on the sector, with activity for well-positioned assets driving the price per square foot for office properties to an all-time high. 

New data from Commercial Edge shows that office vacancy rates increased 290 basis points year-over-year last month, a trend that was driven largely by the millions of square feet of new office space that broke ground prior to the COVID-19 pandemic now coming online. The decrease also reflects the fact that some leases were allowed to expire as companies continue to adjust their return-to-work strategies and physical space needs. The amount of sublease space also shot up in San Francisco (up 4.4% over the previous month), the Bay Area (up 3.7%) and Seattle (up 3.7%).