Office Is On a Slow Slog to Recovery
A new Commercial Edge report shows that average office rates climbed 1.4% year-over-year to an average $38.67 per SF, as firms start to implement their return-to-work strategies. However, optimism should be moderated, as an additional 163 million SF is currently under development with the majority being in central and urban markets. Further, vacancy increased by 2.8% since last year, averaging 15.6% nationwide. The report states that “it comes as no surprise that competitive office markets—such as Seattle, Austin, San Francisco and the Bay Area—have seen their vacancy rates increase from single- to double-digits during the last 12 months as projects encompassing millions of new square feet of office space were being delivered”. On the other hand, well positioned, high-quality office properties apparently continue to attract significant investor and tenant demand.
Manhattan Retail Rents Extend Slide, Showing Covid’s Full Impact
According to a recent report, published by Cushman & Wakefield, Manhattan retail rents continued to fall in the first quarter of this year, even though a greater number of new businesses signed new property leases. The hardest-hit market was again Soho, where rents are down 20% from last year’s $279 per SF and vacancies reached 30%. “The bad news is that first quarter of 2021 is showing the true impact of the pandemic on the market,” Steven Soutendijk, an executive managing director at Cushman & Wakefield said in an interview. “The good news is that landlords are responding and adjusting rents even further downwards to spur leasing.”