The softening in key U.S. office market fundamentals, seen in the prior two quarters, continued in the second quarter of 2023. As a result, net absorption remained negative, while vacancy and sublease space hit new record highs.
The U.S. office vacancy rate stands at 16.4%, an increase of 30 basis points in the second quarter. Vacancy has inched above the prior peak of 16.3%, seen at the height of the Global Financial Crisis, with further upward pressure expected to follow.
On an encouraging note, net absorption, which measures the change in occupied office inventory, was positive in 37% of the metro office markets tracked in our national survey, up from 24% in the first quarter. National office net absorption totaled negative 14.4 million square feet, compared to negative 25.4 million square feet in Q1 2023.
To learn more, download the report.