Tech Firms Lead US Office Leasing Activity
USA – Office rental rates across the country turned positive for the time since the start of the COVID-19 pandemic thanks to 5.4 million sq ft of net occupancy growth, reported Computerworld magazine on Tuesday noon (22 March, SGT).
According to Jones Lang LaSalle (JLL), tech continued to be the top office leasing driver through the end of 2021, accounting for 21 percent of office rental activity during the last quarter of the year. In fact, this group added roughly 3.3 million sq ft of office space in Q4 2021.
“Big tech, in general, has expanded by 10.1 million square feet over the course of the pandemic,” said Phil Ryan, US research director at the real estate consultancy.
However, office rental rates are still under pre-COVID levels. Nonetheless, demand is forecasted to increase incrementally throughout this year because of favourable market conditions, said JLL in its report.
Another good sign is that more office space was leased than vacated for the first time in 2 years during the last quarter of 2021, pushing quarterly volumes to 71.3 percent of pre-COVID levels.
In addition, the average occupancy rate on Kastle System’s Back to Work Barometer climbed to 40.5 percent from 39 percent last November. That’s the highest rate since March 2020, and every US city in the study recorded occupancy gains. Notably, the barometer gauges occupancy levels in 10 metropolitan areas, including New York City, Houston, Chicago, and Washington D.C.
Similarly, data from workplace technology company Freespace showed that office occupancy rates in the US fluctuated in the past 4 months from 11 percent last November to 3 percent in January and 6 percent in March 2022.
“We’re still at the point where the majority of people aren’t even in an office. In terms of demand moving forward, the general consensus is there will be a net decrease in the demand of space in relation to existing footprints.”
“For the market overall, however, it’s less certain, because there is also net growth in terms of the labour force and in terms of the overall number of people who’ll need some level of office access,” Ryan added.