COVID-19’s full impact on the U.S. office market was evident in second quarter 2020, with the largest quarterly drop in demand since 2001, reported CBRE. The 21.5 million square feet of negative net absorption was on par with the second quarter 2009 trough level during the Great Recession and should similarly be the most severe quarterly decline during this downturn. It also was nearly half of third quarter 2001’s record 41.2 million-square-foot decline in absorption.
Various economic indicators now reveal the economy is in the early stages of recovery. The experience of past recessions indicates office leasing will resume after a lag that allows business momentum and confidence to return.
Leasing activity in the second quarter fell by 44 percent year-over-year, increasing the national office vacancy rate by 70 basis points to 13 percent, reported CBRE. Gross asking rents remained stable, but landlord concessions increased. Average rents in downtown office markets
