Office Occupancy Hits Record Lows

A new report from JLL has revealed that office occupancy hit record lows last year.

The data found that the occupancy fell by 84 million square feet, 40 million of which were in the fourth quarter alone.

Over half of the declines happened in CBDs, with Class B buildings seeing occupancy decreases one-and-a-half times quicker than Class A.

New York and San Francisco led the country in occupancy lows, giving back nearly 30 million square feet of space.  

Additionally, negative net absorption in markets that are tech-centric saw the largest drop in office absorption. Occupancy pushed vacancy rates by up to 17.1% nationally.

However, secondary and suburban markets saw their resiliency grow over the last year. As city dwellers started migrating to these areas, their economies were able to become more diversified and stable.

In fact, the report found that metro areas with less than 60 million square feet of inventory saw a negative absorption rate of 1.3%, 60 basis points below the national average.

JLL predicts that this trend will continue, with CBD markets struggling to stay afloat and secondary markets seeing continued stability and fewer occupancy declines.

In the long-term, JLL anticipates that there will be improved leasing and absorption rates as jobs slowly recover from the last several months.