After a dismal 2020 and slow start to 2021, commercial real estate for offices was beginning to see a uptick across major cities—and then the Delta variant showed up. A new report out from commercial real estate giant CBRE, however, shows that it’s not all bad news for offices spaces—particularly here in Los Angeles.
According to CBRE, Los Angeles and Boston stand out as the markets that have best withstood the downturn and are in relatively strong position as of July 2021. L.A. lead the top 12 national markets in commercial leasing activity, landing atop CBRE’s most recent Leasing Activity Index.
Nearly all 12 markets still have relatively high amounts of sublease availability given many business reduced their office footprints when they shifted to more remote working during the pandemic. The Delta variant has slowed the office return for many, but CBRE notes that there are signs of improvement.
After rising by an average monthly rate of nearly 6 percent for most of 2020, the U.S. Sublease Availability Index growth slowed to an average of less than 2 percent per month in 2021. July 2021 marked the first month that the index level fell to 194 from the peak level of 195 in June since the pandemic began.
As of July, six of the 12 markets have an index reading lower than the U.S. average: Houston (96), Washington D.C. (136), Dallas/Ft. Worth (156), Los Angeles (160), Boston (164) and Chicago (187).
The L.A. Business Journal reports that after hitting its lowest level in January 2021, L.A. office occupancy climbed 900 basis points (bps) to 30 percent in early July, as noted by CBRE, citing data from Kastle Systems, which measures the number of times employees use keycards and fobs to enter offices.
You can read more from CBRE by clicking here.