National Office Market Report (February 2022)

South Florida Poised to Keep Growing

Improvement in asking rents is balanced out by some vacancy increases in the largest U.S. markets.

Report Highlights

• Direct asking office rents increased in most markets, clocking in at $38.62 per square foot in January.
• Office vacancy averaged 15.7 percent across the top 50 U.S. office markets.
• Despite omicron-induced concerns, office transaction volume nationwide totaled $5.9 billion at the end of January.
• The active pipeline included 150.5 million square feet of office space under construction as of January.

National average full-service equivalent listing rates averaged $38.62 per square foot in January, up 120 basis points year-over-year. Direct asking office rents rose considerably in South Florida markets including Tampa ($29.70 per square foot, up 6.2 percent year-over-year) and Miami ($43.43, up 5.8 percent).

Meanwhile, office vacancy nationwide clocked in at 15.7 percent in January, up 110 basis points year-over-year. Markets such as Seattle (520 basis points), Austin (420 basis points) and San Francisco (410 basis points) recorded the largest gains in vacancy, driven by an excess of sublease space or company relocations.

Office-using employment on the mend

The office-using sector added 113,000 new jobs in January, up 4.4 percent year-over-year. Although the three office-using employment sectors have fully recovered to pre-pandemic levels, employment data from December 2021 shows that only 24 of the top 50 markets had more office-using employees than in February 2020. Austin recorded the largest office-using employment growth—11.4 percent year-over-year in January—followed by Miami and Dallas.

New supply concentrated in urban submarkets

Some 150.5 million square feet of office space was under construction across the nation at the end of January, representing 2.2 percent of total stock. Half of the amount was being erected in urban submarkets, defined as within the city center but outside of the CBD, where 19 percent of new office stock was taking shape. The remaining 31 percent was located in suburban submarkets. The largest pipelines on a percentage of stock basis were Austin’s (10.3 percent), followed by Miami and Nashville, with 8 percent each.

Read the full Matrix Office National Report-February 2022