Boston, Texas, Florida Set Pace for US Office Recovery
Life sciences segment boosts Boston; but NAR reported that occupied spaces remain largely void of workers.
Top performing office space performance and recovery can be found in nearly every corner of the country, according to fresh reports from CBRE and National Association of Realtors.
Boston – keyed by the life sciences’ sector –was the U.S. leader in pandemic-era office market performance, ranking first in the recovery of office demand, according to CBRE’s monthly “Pulse of U.S Office Demand” report for August.
“Demand for office space remained stable [in August] with life sciences tenants playing a major role,” said Nicole LaRusso, Senior Director of Research and Analysis, CBRE. “Despite a resurgence in new Covid infections, Boston was still the top-performing market in the country, something we believe will continue for the remainder of 2021.”
Meanwhile, half of NAR’s top performing commercial office markets are in Florida (Daytona Beach, Miami, Palm Beach) and Texas (Austin, San Antonio); with Boise, Chattanooga, Myrtle Beach, Omaha and Provo rounding out the list.
NAR: Occupied Spaces Remain Largely Void of Workers
NAR analyzed 390 commercial real estate markets and found a robust recovery with positive net absorption and strengthening rents across the multifamily, industrial and retail property markets as economic production rebounds to pre-pandemic levels. The apartment and industrial sectors, specifically, are reporting historically low vacancy rates, while retail has undergone a more gradual recovery as consumers continue their return to brick-and-mortar shopping.
The office sector, however, NAR said, continues to struggle. Absorption rates and rents have declined and many occupied spaces remain largely void of workers, it reported, while positive indicators have been noted in small- and medium-sized metropolitan areas, which are seeing increases in office occupancy rates that outperform most large cities and the national average.
“Even as the economy makes a steady recovery, the one sector still lagging behind has been the office market,” said NAR Chief Economist Lawrence Yun. “Work-from-home flexibility looks to be the defining shift of the new post-pandemic economy. Despite the overall challenges, however, some local markets are bucking the trend with more office occupancy and rising rents. A combination of strong in-migration and relatively lower cost of doing business is driving these growth markets.”