Office Leasing Activity Muted In March Despite Amped-Up Searches
CBRE says there is ample evidence that many companies are in the midst of a gradual return to the office.
Leasing activity in gateway markets remained muted in March even as companies ramped up their searches for space, according to a new report from CBRE.
The firm tracks three leading indicators of office market activity in the 12 largest US office markets, including tenants-in-the-market (TIM), which categorizes the amount of office space that companies are actively seeking, leasing activity in the form of finalized lease agreements, and the availability of sublease space.
CBRE’s March numbers show Boston leading the recovery among the 12 markets, with other improving markets emerging to include Dallas-Fort Worth and Los Angeles. Manhattan also posted March gains in leasing activity and in TIM, which has been gaining momentum since the start of last year.
The number of tenants in the market ticked up two points over February numbers, while the ranks of markets posting TIM index readings above their pre-pandemic level expanded to four in March from three a month earlier. The leasing activity index fell by 15 points in March to 72, with only Manhattan (up 11 points to 68) and Houston (up six points to 58) posting gains in March. The Sublease Availability Index remains below its pandemic peak of 206 in June 2021, but six of the markets registered March gains, including Houston, Washington, D.C., Denver, Atlanta, Philadelphia and Seattle.
“Many influences are playing out across the office market early this year, and that can cause fits and starts in activity,” said Julie Whelan, CBRE Global Head of Occupier Research. “We see ample evidence through our surveys and client conversations that many companies are in the midst of their gradual return to the office through the balance of this year. As that unfolds, companies will gain more clarity on their office needs and that in turn will contribute to a pickup in leasing activity.”