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U.S. office market softens again in Q2
Research - AUGUST 12, 2022

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U.S. office market softens again in Q2

by Andrea Zander

The U.S. office market experienced softening in second quarter 2022, according to Newmark Research.

Net absorption contracted for the second consecutive quarter, resulting in accelerated vacancy growth. For most of the past two years, office-market fundamentals have followed the pace of public-health recovery, but despite the significantly improved conditions and elimination of pandemic-related restrictions, office-market recovery momentum slowed.

Net absorption measured negative 12.8 million square feet in second quarter 2022, as midyear net absorption tallied negative 16.1 million square feet. The national vacancy rate increased by 122 basis points during the past year to 17.4 percent. Upward pressure on vacancy can be attributed to occupancy losses and inventory expansion. Out of 56 markets observed, 18 recorded positive absorption rates in second quarter, with secondary markets such as Northern New Jersey, San Diego and Charlotte leading in this regard.

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