The office market across Boston has fared well despite Covid. Image – Canva.
  • Office-leasing market remained stable despite Covid disruption
  • The CBRE office report assesses the top 12 markets
  • Boston is currently seeing 23% more tenants-in-the-market than pre-pandemic levels

A report released by CBRE has found that despite ongoing certainty amid Covid, top US Office Markets showed resilience during November.

Minimal change in activity levels was recorded following months of steady recovery, according to CBRE’s Pulse of US Office Demand report.

“It’s rare that a draw can be considered a win, but that is the case with November office-leasing activity in these top 12 markets,” said CBRE Director of Research & Analysis, Nicole Larusso, who is the lead author of the report.

“Uncertainty typically hampers leasing activity. But, with two of our indices showing only tiny losses and the third holding steady, it appears that companies remain focused on their long-term needs for office space.”

nicole larusso
Nicole Larusso of CBRE. Image – Linkedin.

The report uses three leading indicators to evaluate the office market across the top 12 US office markets.

This includes tenants-in-the-market (TIM) – a tool used to quantify the amount of office space that is being actively sought after by companies – and leasing activity.

Boston remains the top leader in recovery of the 12 markets. The Massachusetts capital is currently seeing TIM activity 23% above pre-Covid levels with leasing activity doubling the benchmark. Demand for life-sciences space fuelled this level of activity.

Dallas-Fort Worth also generated strong gains in November, coming in second place followed by Los Angeles, Manhattan and Washington, D.C.

Using an index of 100 that equates to 2018 and 2019 levels, the TIM index remained steady at 85 in November, on par with the peak in June and July. Half of the 12 markets have index readings over 90 – meaning they are very close or above pre-pandemic levels.

Dallas-Fort Worth recorded a 101 reading in November with 99 for Manhattan and 94 for Houston.

Leasing activity falls; subleasing remains the biggest challenge

Using a 2018 and 2019 base index, leasing activity fell by two points in November to 100 – meaning it is the same as pre-pandemic levels nationally.

Boston recorded a 38-point gain in its index to 209. Extraordinarily, this means leasing activity levels are double what they were before the pandemic.

Washington, D.C (122), Los Angeles (109) and Manhattan (102) also all crossed the 100-point baseline in November.

In terms of subleasing availability, the index increased by one point to 197 in November, meaning the overhang is nearly double pre-crisis levels.  This is in counter to the other two indices; a higher reading in the sublease index means there is growth in the amount of space offered for subleasing.

San Francisco, Manhattan, Denver and Boston all recorded declines in their sublease indices for November. Houston and Washington, D.C showed flat readings with increases for the remaining four markets.

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