National Office Stats Paint Brutal Picture

The latest Colliers national office report shows sublease space at a record high, negative net absorption, and overall office vacancy in the United States now at 6.1%. “The gap between asking and effective rents remains significant. Tenant improvement allowances of $100 per square foot or more, accompanied by up to 10 to 18 months of rent abatement, are available for Class A space in several leading metros.” Currently there is 254 million feet of office space form sublease, with the average discount compared to direct space of 29%.  For the rest of 2023 and into 2024, higher vacancies and increased sublease space is expected. In many markets the absolute best buildings in town are leasing well, but this is only 10% of the market. Stay alive until 2025, which is better than Office building heaven in 2027!