Over the last few years, there has been a mass exodus of residents from major metros to smaller more affordable and suburban markets. The pandemic has only exacerbated the trend. While residents are making the move, so far businesses haven't followed—at least not yet. Cushman & Wakefield's research team took a closer look at the migration patterns of businesses, and found that they are staying in major metros.

According to research from Cushman & Wakefield, major metros have accounted for 32% of office leasing activity so far in 2020, well within the historical average of 30% to 40% of total leasing activity occurs in gateway markets, including Los Angeles, Chicago, Washington, DC, New York, San Francisco and Boston. Of course, this is a smaller sample size than typical years due to the coronavirus pandemic, but it is clear that businesses aren't moving out of major markets at this time, even if they are stalling lease negotiations or decisions. For that reason, Cushman isn't making any firm conclusions about business migration.

Fundamentals, though, are clearly softening with office leasing activity down for the year. Nationally, office leasing volume totaled 46 million square in the third quarter, compared to the historical average of 96 million square feet.  Large cities are clearly feeling the impact. Research from Newmark Knight Frank, for example, shows that the office leasing activity in Manhattan during the coronavirus pandemic is down nearly 70% with 8.9 million square feet in transactions.