Marcus & Millichap Pacific Northwest’s Post

The office market is showing promising signs of resilience amid varied company approaches to office usage. Q4 2023 saw a significant positive net absorption, and although Q1 2024 saw some setbacks, the overall outlook is hopeful. Only 11 markets experienced notable reductions, and many saw minimal increases in vacancy rates. Of the 50 major markets tracked, 18 reported falling or stable vacancy rates, with San Jose leading the way with a 90-basis-point drop. These trends suggest that the market might be slowing its previously rapid descent and beginning to stabilize. Download the full report: https://lnkd.in/gr_VMCKe #officeinvesting #cre #commercialrealestate

Some encourage trends in the CRE office market? Hot off the press - CBRE's Q4 2023 US Office Figures. Key takeaways below: 🟢The U.S. office market closed 2023 with a 5th consecutive quarter of negative net absorption (-2.9M sq. ft.), although the level of quarterly negative demand eased in the 2nd half of the year. 🟢Negative net absorption and the completion of 5M sq. ft. of new supply increased the overall office vacancy rate by 20 basis points Q/Q to 18.6%—a 30-year high. 🟢The avg asking rent ticked up in Q4, while the average taking rent was unchanged. 🟢Certain submarkets and buildings are seeing strong demand, contrary to the performance of their broader markets. 🟢Several Sun Belt markets recorded positive absorption in 2023, while newer buildings continued to outperform lesser-grade assets. The average vacancy rate of post-2010 buildings was 3.4% below the U.S. average in Q4. The office market is clearly in flux, but pockets of strength and encouragement remain.

Salt Lake City ranked #16 for office-using employment growth in 2023, surpassing the average U.S. office-usage employment growth. Additionally, the Salt Lake-Provo office market was one of 17 markets nationwide that experienced positive net absorption in Q4. Although primarily influenced by a few significant lease transactions, the quarterly negative demand showed signs of easing in the latter half of the year. Check out the latest CBRE U.S. Office Figures Report here: https://lnkd.in/g6HA9qyc #CBRE #UTAH #SALTLAKECITY #OFFICELEASING #CRE #REALESTATE

Office demand continues to grow steadily, with a 6% increase in Q1 and a nearly 30% growth since Q1 2023. Tenant requirements are at their highest level since Q1 2022, approaching pre-pandemic levels. Across the country, more than 70% of markets have seen quarter-over-quarter improvement, and over 90% have seen year-over-year improvement. Although Q1 lease volume is stable compared to Q4, the market is seeing the return of large-scale occupiers. While the US will have negative net absorption for most of 2024 due to downsizing portfolios, footprints are stabilizing and expiration volumes are normalizing, indicating increased stability in net absorption and vacancy rates by the end of the year. #jll #office #growth #stabilize

America's offices are in 'uncharted territory' as vacancies hit an all-time high. According to a report from Moody's Analytics, which described the US office market as being in "uncharted territory," the national office vacancy rate hit a record-breaking 19.6%. That beats the prior record of 19.3%, which has been hit twice before — once in 1986, then in 1991 amid the savings and loans crisis. That's the steepest quarterly increase since the first quarter of 2021. "Despite the increasingly optimistic consensus on the likelihood of a macroeconomic soft landing along with positive news from the labor market, the permanence of dynamic hybrid models has effectively muted office demand, making the year of 2023 the most downbeat since the Great Financial Crisis," strategists said. Full story on Business Insider: https://lnkd.in/gk83PTDp #remotework #offices #realestate #propertymarket #markets

🚨 America's office vacancy rate hits record high at 19.6%, marking the steepest quarterly rise since 2021 and 280 basis points above pre-pandemic levels. Moody's Analytics describes the market as being in "uncharted territory." Work-from-home trends continue to impact demand, with office values facing a potential 43% decline. #OfficeSpace #CommercialRealEstate #WorkFromHome #MoodyAnalytics #BusinessInsider

The year concluded with numerous lingering questions regarding the overall health of the office market. During 2023, the vacancy rate climbed 120 basis points to 16.9%, surpassing the prior peak of 16.3%. Read more in the 2023 U.S. Office Market Outlook: https://ow.ly/iTLZ50QFQ2e

Moody's CRE data reveals a concerning trend in the office sector as vacancies hit a record high of 20.1%, marking a pivotal shift in market dynamics. Learn how the lasting impact of the pandemic continues to reshape the commercial real estate landscape and what the future holds for the office sector. Read the full analysis on Fortune: https://lnkd.in/eg2x8dXb

New stats are showing office vacancy rates are not only staying up, but climbing. In fact, Moody is projecting that office vacancy rates will continue to climb through 2026. On average, vacancy rates are now at just over 20% with some cities far higher. San Francisco appears to have the highest rate at approximately 34%. It goes without saying this will fundamentally shift the feel and purpose of metro downtowns. This prolonged period of shifting office locations and ongoing work from home flexibility will fundamentally change consumer behavior in the near term. What does this mean for our industry? Obviously, it impacts everything from site location and hours to solutions delivered during the week. The impact of these changes will be felt at both retail and foodservice. What are the new challenges facing consumers in this evolving environment? What are they missing? What would make their lives easier? How do we create compelling and unique value propositions, differentiated not only from competitors but competitive channels? People will still look for breakfast and lunch solutions, but we can't assume the solutions will or should look the way they did before 2020. In fact, these solutions need to be fundamentally different. That means transformational innovation versus iterative innovation, which requires courage and hope. And, honestly, courage and hope is what most of us need now. Read more at Axios: https://lnkd.in/egFZxFcs #work #offices #innovation #trends2024 #foodandbeverageindustry #menumattersllc #food #beverage #foodservice #restaurants #cpg #consumerbehavior #consumerinsights

Global slowdown blues to stall demand growth for office space this fiscal: Crisil. Read more at: https://lnkd.in/duamZjSB #commercialrealestate #realestatetrends #globaleconomy