Uncertainty Still Lingering
With uncertainty still lingering about when or how many workers will return to the office, many companies continued to delay long-term decisions about office space. Many companies weighed their option of downsizing in their current space, causing an increase in the amount of sublet space marketed as available by 430,000 sq. ft. in two years.
The suburban market had an uptick in positive activity, with the majority of space leased during the year was in Class B/C buildings, where tenants signed for over 1.6M sq. ft. in 2021. Absorption declined for the 8th consecutive quarter in the suburban market but is expected to trend positive once tenants move into the leased space. Office investment sales volume trended upward during the fourth quarter. Still, it remained at a three-year low, while the value of total assets transacted increased by 28.1% to average over $206 per sq. ft compared to the 2019 asset value average of $170 per sq. ft.