Forecasts predict a stabilization of the commercial office market
Leasing activity has also increased year over year, indicating that companies have become more willing to commit to office space for longer periods. Additionally, landlords have become more willing to offer larger tenant improvements to encourage signing, indicating that businesses are keeping the upper hand when negotiating leases.
These trends signal a move toward a “more stable equilibrium” for the office market, the NAIOP report reveals.
For the remainder of 2022, net office space absorption is expected to be 46.9 million square feet, which is close to the 46.6 million square feet reported in the previous forecast. This optimism extends to their total net absorption forecast for 2023, which is 47.3 million square feet, with an additional 6.5 million square feet absorbed in the first quarter of 2024.
“We are fortunately seeing that even though the work week is being reshaped and fewer employees are in the office at the same time, companies are still looking for spaces to collaborate and for all employees to be in the office for at least part of the week. “, said Thomas. J. Bisacquino, President and CEO of NAIOP. “This obviously bodes well for the office sector and for the commercial real estate sector as a whole.”