In a sign that the post-pandemic economy is still not totally post-pandemic, office leasing activity decidedly slowed during the early part of this year, according to a new report issued by the Coldwell Banker Richard Ellis Group.
The Dallas-based commercial real estate services and investment firm, looking at a dozen of the nation’s largest office markets, noted that companies were generally delaying decisions on making long-term office space commitments.
In a statement, Julie Whelan, research analyst for CBRE, remarked that “uncertainty in the market from either the pandemic, inflation, or geopolitical events can have a cooling effort on office activity.”
But Whelan added that such factors could portend future growth in that the “sustained level of activity by companies seeking new office space will translate to more leasing activity in the months ahead.”
The CRBE’s Pulse of U.S. Office Demand report presents an index with any reading of 100 being equal to the office rental market as it was in the booming pre-pandemic months of 2018 and 2019.
According to that index, the average from the 12 cities surveyed for the first two months of this year came in at 89, with the Texas cities of Houston and Dallas representing a buoyant 126 and 116 respectively.
Denver, on the other hand came in below the 100 cut off, at 96, followed by Seattle at 92.
Much lower on the list was Atlanta at 84, Los Angeles at 67, and Philadelphia at 52.
While the overall leasing numbers could be stronger, a press release from CRBE contends that “office demand is expected to stabilize in the near term as more companies encourage employees to return to the office due to a sharp decline in Covid infections.”
The firm is further predicting a generally healthy office leasing market for the second half of this year.
By Garry Boulard
