Omicron Causes Further Delay in Return-to-Office
While the summer of 2021 was marked by increased optimism regarding a fall return to the office, the emergence of the Delta and Omicron variants put plans on hold for the foreseeable future. When a return to the office does finally happen, office utilization will look much different than it did two years ago. CBRE’s Workforce Sentiment Survey revealed that 85% of workers would like to be remote at least two to three days a week, and firms seem likely to accommodate them for the most part. The Occupier Sentiment Survey showed 87% of firms will adopt a hybrid work program of some kind.
In response to this, CommercialEdge just released its January national office report, analyzing the US office market’s performance through December 2021.
Key takeaways from the report:
- The national office asking rents inched up 1.8% Y-o-Y to $38.44 per sq. ft. in December. In Denver, the average asking rate was $30.75.
- The national vacancy rate averaged 15.5% across top office markets. In Denver, the vacancy rate was at 16.3%
- Transactions closed totaled nearly $77.5 billion by the end of December, as the average sale price for office properties across the top 50 U.S. markets climbed to $293 per square foot. In Denver, 1144 Fifteenth Street was the top listing at $54.66 per square foot.
- Office-using employment sectors grew 3.6% Y-o-Y in December. However, there are 110K fewer office jobs than the pre-pandemic peak in February 2020.
- Nationally, 156.6 million square feet of new office stock was under construction by the end of 2021. In Denver, 1,259,923 square feet was under construction in December.
For more insights read the full report here.