Office Landlords Hold Firm On Asking Rents As Demand Increases
Tour activity is up across most major markets.
August 5, 2021 | Lynn Pollack | GlobeSt.com
Demand for office space is predicted to rebound for the remainder of this year, causing landlords to stand firm on asking rents as new stock comes online, pushing rates upward.
A new report from Transwestern shows that tour activity is up across most major markets, though “notable deal volume” has not yet materialized. The vacancy rate remains at 12.6% nationally, with net absorption at 22.9 million square feet in Q2. But annual asking rents are up 1.9% year-over-year, signaling what many believe will be a return to normal sooner than later.
“We expect pent-up demand to emerge starting in Q3 with greater traction in Q4, as tenants come off the sidelines,” the report notes. “With the market in tenants’ favor, select companies will take advantage of favorable financial terms… The office is not dead but will evolve to meet new challenges and work patterns.”
