Commercial News » Los Angeles Edition | By Michael Gerrity | September 17, 2021 9:07 AM ET
According CBRE's new "Pulse of U.S. Office Demand" monthly report, activity in the 12 largest U.S. office markets indicates that many have started their recovery from the pandemic-induced downturn.
CBRE's analysis of the indices based on July 2021's activity identified Boston and Los Angeles as the markets farthest along in their recovery. In the next tier of markets, Dallas-Fort Worth, Seattle and Washington, D.C., have shown modest improvement. Another five markets have shown early signs of improvement: Houston, Atlanta, Manhattan, San Francisco and Denver.
"This data shows that office-market demand is beginning to turn the corner, though the recovery will be a slow one," said Nicole LaRusso, CBRE Senior Director of Research & Analysis. "The indicators of demand tracked by these indices are the drivers of improvement in the overall market and ultimately will factor into improvement in broader measures such as occupancy and lease rates, which will be slower to recover."
"To be sure, various factors such as the Delta variant of COVID-19 have hampered both the economic and office-market recoveries as well as companies' plans to return to normal office occupancy," said Julie Whelan, CBRE Global Head of Occupier Research. "We might see an influence on the indices in August or September from companies opting to delay their full return to the office. But there is some cause for optimism due to early signs that the recent virus resurgence may be peaking."
A national view of the indices reveals the nascent recovery. In each, a reading of 100 signifies pre-crisis conditions of 2018 and 2019.
CBRE's report tracks three major indices to gauge the recovery of office-market demand, both nationally and for each of the 12 markets. The report and its indices examine Tenant-in-Market (TIM) activity, which entails companies actively seeking office space; leasing activity in the form of finalized lease agreements; and sublease availability.