Snapshots

Mixed-use submarkets showing resilience despite broader office slowdown

August 31, 2023

Areas with a more diverse distribution of property types among commercial, residential and entertainment uses have seen more resilient demand and a general sense of heightened vibrancy that has driven a rising profile within their markets during the pandemic.

Off-core mixed-use submarkets tend to depart from the dominance of office in the broader CBD: in Chicago, Boston, San Francisco and Washington, DC CBDs are comprised by over 70% office space, while mixed-use submarkets in those metros average just 58% of space dedicated to the office sector.

Submarkets with mixed-use or destination characteristics saw a less acute slowdown in office leasing volume as they have grown to capture a greater share of market-wide leasing. As a result, these markets have seen occupancy gain during the pandemic, and tend to have marginally lower vacancy rates than the remainder of the market despite a high volume of new construction adding supply consistently.

Law firm leasing is exceeding pre-pandemic levels

Positive leasing momentum in recent quarters has driven gross U.S. office leasing activity to 75% of pre-pandemic levels.

Conversions are helping offset the rise in vacancy

Conversions are mitigating the rise in vacancy

Office demand continues steady path of recovery

Office requirements trending upwards for four consecutive quarters