Snapshots
High-quality product and locations are seeing the earliest recovery
December 11, 2024
Contributors:
- Jacob Rowden
- As leasing activity has recovered in recent months and inventory removals accelerate, availability rates are beginning to decline across most markets, but declining availability has been occurring for high-quality product and prime locations for multiple years in most cities.
- Newer supply has seen strong demand throughout the pandemic as tenants sought to upgrade older spaces, and as the pipeline has declined in the past two years availability rates have been declining for nearly four years, with new supply currently less than 15% available.
- Irrespective of age, buildings in prime locations are also seeing accelerated demand as newer supply fills up: transit-accessible offices have seen availability decline 290 basis points from the peak at the beginning of 2022, and offices in mixed-use developments or submarkets have declined over 500 basis points since mid-2021.
- Increasingly, larger tenants seeking to upgrade into higher-quality spaces or prime locations will face limited options as availability continues to decline amid limited new development.
