The United States has been dealing with the COVID-19 pandemic for more than two-and-a-half years. And throughout these COVID months, the U.S. office sector has continued to struggle with high vacancy rates.
And the latest research from CommercialEdge shows that vacancies aren’t falling yet.
CommercialEdge, in its August office report, said that the national office vacancy rate stood at 15.1% in July, up 10 basis points from the same month in 2021.
At the same time, listing rates for office space aren’t rising, either. CommercialEdge said that the average full-service equivalent listing rate was $37.75 a square foot for U.S. office space in July. That is a drop of 2.3% from the same month a year earlier.
Some markets, though, are performing better than others. The Minneapolis-St. Paul market, for instance, had an office vacancy rate of 14.1% in July. That was down 120 basis points from the same month a year earlier.
CommercialEdge said that the top office listing for the Minneapolis-St. Paul market in July was The Offices at MOA, which had a listing price of $40 a square foot.
In Chicago, the office vacancy rate hit 18.9% in July, up 240 basis points from a year earlier. In Nashville, the vacancy rate was also 18.9% in July, an increase of 150 basis points from 12 months earlier.
Across the country, 149.5 million square feet of new office space was under construction as of July, according to CommercialEdge’s report. Deliveries of new office space this year totaled 28.7 million square feet through July of 2022, with nearly 42% of these deliveries coming in the suburbs.
In the Twin Cities market, there was 473,050 square feet of office space under construction as of July, while in Chicago, that number stood at more than 2.5 million. Nashville had an impressive 3.5 million square feet of office space under construction as of July of this year.
CommercialEdge reported $51.9 billion of office sales this year through the end of July. These transactions generated an average sales price of $265 a square foot.