Over the last few years corporate space downsizing and hybrid working trends have created a precarious ownership environment for some office building landlords worldwide. When office buildings don’t have enough tenants paying rent, there is a real possibility that a foreclosure could occur.
Even though the industrial markets remain tight there are more space options today for occupiers to consider as compared to a few years ago. The amount of new warehouse space being delivered to the market, coupled with sublease space options, has increased vacancy levels slightly
Overall office market vacancy levels will remain elevated in 2024 in most markets as corporate space occupiers continue to downsize their footprints as lease terms expire. Large cities such as New York, San Francisco, Chicago, Los Angeles, Seattle, and London experienced significant negative absorption in 2024 which increased office vacancy rates.
The retail markets remain quite healthy with positive absorption in most major cities during 2023. Overall vacancy rates, including single tenant properties, range from 2.5-5%. Asking rental rates increased throughout 2023 and that trend is expected to continue into 2024.
