The national office vacancy rate stood at 19.4% at the end of October, a substantial 160 basis point rise from the same period in 2023, according to the latest Yardi Matrix U.S. office market outlook.
Report Highlights
- The national office vacancy rate reached 19.4 percent at the end of October, a 160-basis-point increase from the same time in 2023.
- National full-service equivalent listing rates averaged $32.79 per square foot, a 10-cent decrease from the previous month.
- The office construction pipeline continued to shrink, with 60.8 million square feet underway as of October.
- Office investment year-to-date in October totaled $29.2 billion.
- Office properties traded at an average of $177 per square foot.
Office vacancies rise, rents hold steady
The national office vacancy rate climbed to 19.4 percent by the end of October, marking a 160-basis-point increase compared to the same time in 2023, according to Yardi Matrix. Tech-driven markets continued to post some of the highest vacancy rates, as remote and hybrid work models maintain a strong influence on the sector, given the flexibility of tech roles.
San Francisco’s vacancy rate rose to 27.7 percent in October, up 360 basis points year-over-year. Seattle experienced a 390-basis-point increase, reaching 25.8 percent, while the Bay Area hit 26.4 percent, reflecting a sharp 630-basis-point jump over the past year.
National full-service equivalent listing rates averaged $32.79 per square foot in October. This represented a modest 10-cent dip from the previous month but a 3.3 percent year-over-year increase. Among major markets, San Francisco reported the highest listing rate at $69.14 per square foot, followed closely by Manhattan ($68.48), the Bay Area ($54.20), Boston ($53.35) and Miami ($52.84).
Office pipeline shrinks to 60M square feet
Boston led the country with 10.7 million square feet of office space under construction, equating to 4.3 percent of its total inventory. San Francisco followed with 3.8 million square feet, representing 2.3 percent of its stock. Austin reported 3.5 million square feet under construction, or 3.7 percent of its stock. San Diego had 3.1 million square feet in progress (3.2 percent of inventory), while Dallas reported 3.0 million square feet, or 1.1 percent of its total stock. Miami also saw nearly 2.1 million square feet underway, accounting for 2.9 percent of its inventory.
The office construction pipeline had continued to further diminish, totaling 60.8 million square feet as of October—amounting to 0.9 percent of total inventory, according to Yardi Matrix. Construction activity has dropped sharply this year, with 43.9 million square feet delivered by October and only 8.5 million square feet breaking ground.
Year-to-date office investment reached $29.2 billion in October, with an average sale price of $177 per square foot, according to Yardi Matrix data. Manhattan led in sales volume with $3.3 billion in transactions, followed by Washington, D.C., at $2.5 billion. The Bay Area came in third, recording $2.1 billion in office sales year-to-date in October.
Read the full Yardi Matrix Office Market Outlook: November 2024.
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