Office occupiers and investors are increasingly shifting to the highest quality properties as the sector grapples with how best to adapt to hybrid work.
A CBRE analysis of 12 major US metros observes an ongoing "flight to quality" as occupiers work to lure employees back to physical offices. The firm reviewed more than 2,700 lease transactions across 12 large office markets since 2019 and found that average effective rents for top-tier properties increased by 3.8% in 2021 and by 6.7% so far this year. On the other hand, average effective rents for lower-tier properties slumped by 3.4% last year and by 1.1% so far this year.
The cities included in the analysis were Atlanta, Boston, Chicago, Dallas/Fort Worth, Denver, Houston, Los Angeles, Manhattan, Philadelphia, San Francisco, Seattle and Washington, D.C.
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