While average sale prices of office buildings in central business districts have fallen to historic lows, prices in urban submarkets are pushing upward, in a move some experts say counters the 'death of the city' narrative that's become so prevalent post-COVID.
The average sale price of assets in CBDs peaked at $400 per square foot in 2019 and fell to $379 in 2020 before hitting $284 this year, according to a recent analysis from YardiMatrix. But meanwhile, the price of assets in urban submarkets have grown from $399 to $511 per square foot from 2019 to 2021. Overall, Yardi logged $36.9 billion in office transactions this year through July, putting 2021 on track to surpass 2020 transaction volume.
At the same time, vacancy rates appear to have fallen off.
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