Buoyed by growth in secondary markets, office leasing activity rose by almost 8% in the third quarter, signaling a willingness among tenants to make longer-term real estate decisions.  

A new report from JLL notes that gross leasing volume approached 40 million square feet in Q3 for the first time since the onset of the COVID-19 pandemic. Total deal volume is up 1.7% year-over-year but still remains 43.8% below 2019 levels. Activity was mainly concentrated in secondary markets in the Sun Belt and West.

Overall, macroeconomic factors remained positive for the sector, though slightly downgraded from prior forecasts. Occupancy losses decreased significantly, with net absorption of -7.3 million square feet, the lowest quarterly metric since the pandemic began. Sublease space also contracted during Q3, "providing further evidence that the market is an inflection point," the report states.