Vacancies for office properties in the top 50 markets across the US hit an eye-popping 16% in April, but investors are still bullish on the sector, with activity for well-positioned assets driving the price per square foot for office properties to an all-time high. 

New data from Commercial Edge shows that office vacancy rates increased 290 basis points year-over-year last month, a trend that was driven largely by the millions of square feet of new office space that broke ground prior to the COVID-19 pandemic now coming online. The decrease also reflects the fact that some leases were allowed to expire as companies continue to adjust their return-to-work strategies and physical space needs. The amount of sublease space also shot up in San Francisco (up 4.4% over the previous month), the Bay Area (up 3.7%) and Seattle (up 3.7%).

Average office lease rates across the US are continuing their slow slog upward and are now up 0.2% year over year to just below $40 per square foot. The average full-service equivalent listing rates across the 50 markets surveyed by Commercial Edge span from more than $21 per square foot to roughly $83 per square foot. LA showed the most growth year over year, with a 6.5% increase to $40.65 per square foot, followed by Washington D.C. (an increase of 4.8%) and Boston (an increase of 4.1%). On the other end of the spectrum, San Francisco office lease rates declined 5.1 year over year, followed by Houston.