Office Vacancy In US Cities Still High
USA – Even though it appears that the world is on the cusp of a post-COVID era, office vacancy in a number of major cities across the country continues to be high, reported the Commercial Observer on Tuesday afternoon (8 March, SGT).
For instance, the office vacancy level in Manhattan reached a record high of 19.2 percent at the end of January, according to data from real estate consultancy CBRE.
Data from property consultancy Cushman & Wakefield (C&W) also showed that the vacancy rate in Dallas/Fort Worth, the biggest office submarket in Texas, increased from 17.6 percent in Q4 2019 before the start of the pandemic to 22 percent in Q4 2021.
In Austin, which is widely considered as the hottest secondary property market in the United States, the overall office vacancy level spiked to almost 20 percent from just 9 percent in the last quarter of 2019.
Similarly, the overall office vacancy rate in San Francisco climbed from 5.4 percent to nearly 20 percent over the same period, while that in South Florida market’s office market rose from under 13 percent to almost 16 percent. The latter encompasses the counties of Miami-Dade, Broward, and Palm Beach.
Nonetheless, CBRE’s Chief Global Economist Richard Barkham is optimistic that the world’s office markets will eventually rebound to their pre-COVID status. However, it could take some time, possibly several years.
Prevailing problems, like inflation and the fallout of Russia’s invasion of Ukraine, are already replacing COVID issues, he said. One example is the likelihood of fast and dramatic increases in interest rates in a bid to combat inflation.
Meanwhile, hybrid work could become more normalized, while staff coming into the office are more likely to demand more space for health reasons
Either way, he believes that the office and businesses in the workplace will endure. “The office remains central to the operating model of businesses. We’re going back to pre-pandemic norms,” added Barkham.