Market sentiment suggests we are nearing an inflection point for the office market. Still, the Delta variant reversed the post Labor Day return to the office, with many office occupiers pushing back their return dates. The impact the pandemic has had over the last 18 months is clear.
Newly available space returned to the market early in 2021, though the pace has shown signs of slowing down during the third quarter. Renewal activity persisted, as tenants delayed significant real estate decisions, while reassessing space needs. These trends have kept net absorption negative for the year and increased the availability rate to its highest point on record. While COVID-19 has had a dramatic and unpredictable impact on the office market, the trend of repurposing obsolete office buildings in Westchester, which was prevalent prior to the pandemic, will likely be accelerated. The adaptive reuse trend will help strengthen market fundamentals in the coming quarters.