Profimex Market Review Update – December 1, 2020
10 Office Markets Facing Deep Challenges
According to a new research paper, published by Colliers International, the top 10 office markets across the US continued to experience negative absorption, lower rental rates and increased vacancies. The report mentions the following cities: Manhattan, Washington DC, Chicago, Houston, Los Angeles, San Francisco, Atlanta, Dallas, Seattle, and Boston. The largest increases in vacancy rates were tech-heavy cities, such as Boston and San Francisco, with vacancy expansions of 160 and 220 basis points, respectively. Further, sublease space offerings are up 35%, with Manhattan offering more space than other cities with 3.1 million square feet of space.
New Multifamily Continues to Capture Investor Confidence
The results of the recent market survey by the National Association of Home Builders (NAHB) shows that confidence in new multifamily housing increased over the third quarter. Barry Kahn, chairman of NAHB says that “sentiment regarding the multifamily housing market has risen from recent lows, but there are persistent headwinds and ongoing uncertainty. Nevertheless, lenders see multifamily performing better than most other forms of commercial real estate.” Multifamily investors continue to perceive the long-term fundamentals as favorable, partly due to housing shortages and affordability issues.