While office leasing is not roaring back, it is experiencing heightened activity levels and signs of promise in some product categories and locations.
At JLL, “leasing activity is down 30 percent in terms of actual deals closing,” said Robert Manekin, Managing Director – Markets. After experiencing very little leasing activity from April to September 2020, “starting in February 2021, activity levels have been good to excellent… Compared to pre-pandemic levels, tours and inquiries are back in full force. However, there appears to be reluctance when it comes to signing new leases.”
“We are experiencing very strong office demand in buildings with smaller sized office suites in the 1,000 square foot to 3,000 square foot range,” said Kevin Keane, Senior Vice President of Office Leasing at David S. Brown Enterprises. “Office leasing activity in buildings with larger floor plates that accommodate corporate office tenants in the 20,000 square foot to 30,000 square foot size range has been below average.”
David S. Brown, which experienced record office leasing volume in 2019, expects “that the 2021 full year volume will fall below these record levels as we are seeing some slowing in office showings. Several large tenant requirements have been postponed temporarily due to the pandemic,” Keane said.
Terri Harrington, Senior Vice President at MacKenzie Commercial Real Estate Services, describes a similar mixture in leasing conditions.