Here's How The Largest US Office Markets Fared Last Month

Twelve of the largest US office markets showed signs of recovery in October, as more tenants seeking space entered the market across many of the top cities coast to coast, according to analysts from CBRE.

Buoyed by a strong medical office and life science sector, Boston continued to set the recovery’s pace in October, while office demand gained strength in the Atlanta market. Houston, Manhattan, Washington, D.C., Denver and Seattle also showed improvement, according to CBRE.

CBRE’s tenants-in-the-market index hit 86 in October, up four points from September, and recovery on that front was positive across most of the cities the firm tracks. Boston is the “US leader in pandemic-era office market performance,” according to CBRE, with space requirements for tenants in the market 34% above the baseline level.

“The growth of tenants actively looking for space is a precursor of increased leasing to come,” said Nicole LaRusso, CBRE Senior Director of Research & Analysis. “Recent strong job growth should add further momentum to the office market, particularly as consumer and business confidence increases. Barring another COVID resurgence, the office market appears to be on firm footing heading into 2022.”

Leasing activity and sublease availability remained steady, meanwhile, with the index for the former falling one point in October. Boston fell last month after a spike in September that was driven primarily by two massive deals; the national index excluding Boston would have otherwise increased five points in October. Six markets showed growth in leasing activity, led by Atlanta, Houston, and Washington D.C. Levels also improved in Seattle, Denver, and Philadelphia.

Four markets—Boston, Atlanta, Houston and Washington, D.C.—have exceeded their pre-pandemic leasing index levels, according to the report.

The overall sublease availability index ticked up one point to 196, following three months of decline after a June peak. Atlanta led the pack again in terms of improvement, followed by Chicago, Manhattan, Philly, and Seattle.

Los Angeles continues to see leasing stall amid lingering pandemic restrictions and lower-than-normal occupier confidence, however. The city’s TMI index increased in October after months of decline and pandemic restrictions shuttered normal touring activity, but submarkets with high concentrations of entertainment and production companies are faring comparatively well. While leasing remains at 74% of its pre-pandemic baseline, the report notes that the leases that were signed were mostly new leases and expansions, “a marked change from the short-term renewals that dominated” earlier in the pandemic. Demand in West Los Angeles remains particularly strong.

And across the country, Manhattan saw a “notable uptick” in tenant inquiries, which CBRE says “portends further market improvement.”