In My Opinion, Now Is The Low Point In The Office Curve
This is my 45th year representing corporations in the sale and leasing of Northern California office space. I may be sticking my neck out, but that is the privilege I have in writing this blog. I believe that we are finally at the low point in the office leasing cycle, and that while we might stay at the low point for some time from here out things will get better. This will vary by region. There was a recent article that the Seattle market boomed during the Pandemic, with the largest tech firms leasing 25% more space than they had pre-pandemic. However, this was an exception, and for the most part the U.S. office market has been severely impacted by Covid-19. There are now signs of recovery, The national available inventory of office sublease space is going down. Major companies are making huge forward commitments for office space. As just one example, YouTube is in the process of obtaining approvals in San Bruno for a long-term 1.8 million square foot office expansion. Apple, Google, Facebook and many others are also acquiring huge office campus locations. Down in the trenches my office leasing associates report surges of leasing activity, although primarily with smaller-size tenancies. California has had one of the most restrictive mask mandates, has one of the lowest case counts but some counties are now easing mask mandates. While there is no overall decision of hybrid vs virtual vs must be in the office, most agree that flexibility for the workforce will be here to stay. If you are a landlord the future looks brighter than it has been for some time. If you are a tenant, call me because now is when you should be negotiating your lease extensions or relocations. At some point the huge landlord concessions found in many markets will begin to slowly diminish. Now is the turning point!
