Colliers’ latest research report — The Q1 2020 Office Market Outlook Report — highlights the office market’s response to the COVID-19 pandemic. The U.S. office market showed its first signs of cooling in the first quarter of 2020. Net absorption fell sharply but remained slightly positive, while there was a marginal increase in vacancy, which was coming off a record low. Construction levels fell but remain elevated while rents, for the most part, held firm. Although sales volume was down, capitalization rates (cap rates) and pricing held steady.
- Vacancy remains tight: U.S. office vacancy rose slightly in Q1 2020 but remains low by historic standards.
- Slight increase in rents: Average asking rents increased marginally in the first quarter with the greatest appreciation taking place in the suburbs.
- Absorption falls: Net absorption fell in Q1 2020, with suburban markets registering the bulk of any increases.
- Construction slows slightly: Office construction fell in the first quarter but remains elevated.
- Sales volume falls: Office sales volume is down year over year. Investors continue to favor the suburbs.
For more details on the latest office trends, download the Q1 2020 U.S. Office Market Outlook.