Six Office Markets That Have Seen Growth This Year

The office market may have its problems, but not everywhere according to a recent Green Street weekly institutional marketplace update that included data on how certain property types were doing by major metro in a year-over-year look at the first half of 2023 and 2022. 

Though while there is good news for some, there’s bad news for more.

Office has likely been one of the most followed property types of late for no other reason than uncertainty about how it would do. Hybrid work, companies considering how they might cut back on real estate use and cost, all are raising questions of how many investors or existing property owners and managers want to pick up more office buildings.

According to this report, in a handful of major metros, there has been appetite aplenty. At the top of the charts was Tampa-St. Petersburg, FL. The dollar volume wasn’t the largest, with $129.3 million across 10 properties, putting them in spot 12. Remarkable, though, was the 138.3% growth over 2022. 

Next highest growth, Oakland-East Bay, CA. In raw numbers, it landed at number 8 with $148.3 million and 13 properties. That still represented 36.8% growth over last year.

Los Angeles was in the top position in raw numbers of $551.3 million and 45 properties. Significant sales, but growth on big numbers always gets hard, so the 21.0% growth over the first half of 2022 is nothing to dismiss.

The fourth largest growth was 12.2% in Atlanta. The metro’s $131.7 million and 11 properties put it in spot 10 of absolutely numbers. Central New Jersey, number 18 with its $102.0 million in sales over 9 buildings, saw annual period growth of 8.5%, which was fifth largest.

Bringing up the end was the 3.9% year-over-year growth for Washington, D.C. and its $188.1 million and 14 properties. Still, given market conditions and contracting transactions, good relative performance.

The other 14 of the top 20 metros that Green Street ranked all saw negative change between 2022 and 2023. Let’s take a look at the bottom six, to balance the top half dozen.

Ft. Lauderdale, with a half-year 28.4% drop over 2022, was the 15th worst performing annual comparison. It was also number 19 on the absolute number list, with 101.3 million and 11 properties.

Phoenix, with sales of $281.3 million on 23 buildings, putting it at the second highest total after Los Angeles, was 16 in percentages, dropping by 28.4%.

San Jose brought in $119.2 million over 10 properties, which was 17 in the absolute dollar ranking. But it was in 18th place on percentage growth, seeing a loss of 32.2%.

Orange County took the 18th spot for comparisons, with its 45.2% drop on the absolute sale sixth place on $165.5 million, 12 properties.

Miami, Sun Belt royalty, saw $145.8 million, 16 properties, which on the absolute scale was 9, but number 19 for the drop of 48.2%.

Finally, San Diego saw $124.8 million and 13 buildings for 13th place in dollar sales, but dead last in comparative sales among the 20 at a fall of 55.0%.