Office investors remain on the hunt for high-quality product as we approach the midyear mark, with many holding off for the pandemic's end and more clarity around how companies will use office space going forward. 

The overall vacancy rate across the top 50 US markets remains at about 15.6%, according to the latest data from CommercialEdge, while average leasing rates ticked up 0.4% year-over-year. And against that backdrop, high-quality assets in urban submarkets—defined as those outside CBDs but still within the urban core—have emerged as the most intriguing for investors, pushing the average urban office sales price to $429 per square foot, a 4.5% increase over 2020.

Four of those sales—in Boston, San Francisco, Manhattan, and Dallas—account for $3.8 billion in transaction volume this year, nearly 17% of all sales nationwide. And transactions closed during the first five months of the year totaled $22.5 billion, on par with the total office sales volume recorded last year.