The COVID-19 pandemic hasn't just ravaged hotel and retail properties. The office market has taken its biggest hit in almost two decades from the virus.
During the second quarter, net nationwide office leasing dropped by 21.5 million square feet _ the most substantial slide since Great Recession, according to a new report by commercial property firm CBRE.
"Leasing activity in the second quarter fell by 44% year-over-year, increasing the national office vacancy rate by 70 basis points to 13%," analysts with CBRE say in the study. "COVID-19\u2032s full impact on the U.S. office market was evident in second-quarter 2020 with the largest quarterly drop in demand since 2001."
The freeze in demand for office space across the country has caused a surge in the supply of sublease space as businesses put surplus offices up for grabs.
"Markets with large concentrations of technology companies like San Francisco, Austin, downtown Chicago and Boston have seen significant growth in sublease space," CBRE said in the report. "In Dallas-Fort Worth and Houston, less severe declines in employment may have limited additions of sublease space thus far.
"Regardless of varying local market dynamics, more sublease space is expected to favor tenants in the budding recovery."
Through the first half of 2020, net office leasing in the Dallas-Fort Worth area has declined by almost 2 million square feet because of COVID-19 and the resulting job losses and recession.
It's the largest such North Texas office sector retreat since the Great Recession
Office leasing activity in the area has slowed, with many companies still having most of their employees working from home.
