NAIOP projects strong rebound for office market

A demand forecast by the NAIOP Research Foundation is projecting a strong resurgence of the U.S. office commercial real estate market through 2023.

As the unemployment rate declines, more workers return to the office and the economy continues to improve, the office space-net-absorption forecast has been revised from 1.8 million square feet to 8.3 million square feet in fourth quarter 2021.The total net absorption in 2022 is forecast to be 53.5 million square feet, with a quarterly average of 13.4 million square feet. In 2023, the projected net absorption is 34.3 million square feet during the first three quarters, with a quarterly average of 11.4 million square feet.

This forecast is dependent on continued economic growth, which seems plausible given recent data. The measured unemployment rate in September was 4.8 percent, down from 6.1 percent in April. Supply-chain issues have resulted in higher consumer prices and stoked inflationary concerns. Still, real Gross Dom