The office sector has been weathering the COVID-19 pandemic better than retail, partly because of protection from long-term leases, but office fundamentals started to slip in the second quarter, according to a new report by REIS, a subsidiary of Moody's Analytics.
The national office vacancy rate jumped by 10 basis points, ending the quarter at 17.1%. REIS forecasted that the national office vacancy rate will rise to 19.3% by year-end and peak at around 20% in 2021. That exceeds the previous historic high vacancy rate of 19.7% at the peak of the Savings and Loan crisis in 1991, the report said.
Only 3.3 million square feet of office space came to market, compared to a quarterly average of 11.8 million square feet in 2019, because construction slowed markedly, the report said.
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Meredith Hobbs
Meredith Hobbs writes about the Atlanta legal community and the business of law. Contact her at [email protected] or 404.419.2837. On Twitter: @MeredithHobbs.
