Third Quarter Performance Provides Hope for Office Market
A surge in office leasing contributed to the 155,072 square feet of positive occupancy gains for Q3 2022 as vacancy rates fell from 14.18% in Q2 to 12.85% in Q3. As a result, this quarter’s positive net absorption eliminated a sizeable portion of the occupancy losses recorded during the first half of 2022. At the end of the third quarter, only a slight loss of 1,139 square feet of year-to-date net absorption existed.
Tenancy grew in nearly every office submarket during Q3 2022, and all classes of office buildings reported healthy gains during the quarter. Central Pacific Plaza, 677 Ala Moana, Waterfront Plaza, Airport Center, Ala Moana Pacific Center, Pan Am Building, and Harbor Court contributed more than 126,000 square feet of positive net absorption in the past three quarters.
155,072 square feet of Q3 2022 occupancy growth buoyed the office market
Vacancy rates fell below 13% for the first time in three quarters
Healthy leasing activity boosted nearly every office submarket
“Return to Office” discussion emerges once again
Office conversion activity to offset future vacancy rate increases