Throughout 2021, we saw news touting a positive financial outlook for the commercial real estate office market. The headlines aren't telling the full story. Businesses shouldn't believe the hype. There’s a ton of misinformation out there.
Although the published public prognosis seems to be positive and new leases are being announced, this is not an accurate picture. The market is not going to get better for quite a while – and the Delta, Omicron, and subsequent variants will only prolong financial improvement. There is a much longer road to recovery. This reality should be better understood and accepted. Businesses who are encouraged to renew inflexible office leases for long periods are making a mistake. The longer employees get comfortable working remotely, the harder it will be to entice them to come back. Technology will only get stronger, and the need for space will only diminish further.
What’s more, is that most landlords in the U.S. are not recognizing this significant increase in availability and businesses’ objectives to occupy less space. Despite record availability rates in office buildings, asking rates remain unchanged from record highs in 2019. The average broker accepts these unrealistic and inaccurate elements as dictating the market - passing on inflated rates and misinformation to their clients.