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U.S. Office real estate - statistics & facts

The office sector in the United States was badly hit by the coronavirus (COVID-19) pandemic and still has a long way to recovery. Many companies moved to a hybrid working mode, downsized, did not renew their leases, or paused their plans to expand office locations. This led to vacancy rates rising and leasing activity falling. Amongst the leading office space markets, office space absorption remained negative during the second quarter of 2021, meaning that more office space was vacated than leased. In Manhattan, NY, the home of the London Stock Exchange and the heart of the U.S. financial sector, the net absorption rate was 3.2 million square feet. In Dallas and Houston, TX the vacancy rate exceeded 25 percent.

Office investment and rental rates

Offices are one of the major asset classes for real estate investors. In the second quarter of 2021, the size of the office real estate investment market in the U.S. was valued at 24.4 billion U.S. dollars. Despite the fluctuations, rents have steadily increased in the recent years and are likely to continue rising. According to the office rental index, as of September 2021, gross rents increased by over 24 percent since 2008 when the index was set to 100. The most expensive office markets were Manhattan, NY and San Francisco, CA with an annual square footage rent of 128 U.S. dollars and 95 U.S. dollars, respectively.

Does the office have a future?

The coronavirus pandemic has proved that office work can be more flexible, and many jobs can be done remotely, but it has also shown that offices spaces remain popular among employees. Both C-suite level and office employees recognize the benefits of flexible working models. According to a survey, the vast majority of office workers prefers to work one or more days in the office, and close to 80 percent of surveyed respondents at C-level positions plan to introduce hybrid working model after the coronavirus pandemic.

Interesting statistics

In the following 6 chapters, you will quickly find the 32 most important statistics relating to "Office real estate in the U.S.".

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