Asking rates in the office market decreased from $83.11 to $78.33 in Q1 – a 5.8% decrease from Q4 2020. Year-over-year, vacancy has more than tripled from 5.0% to 16.5%, and quarter-over-quarter increased by 3.5% overall. Net absorption remains negative with an additional 2.8M SF of negative absorption for the quarter.
Sublease rents in the market are discounted up to a 40% discount versus comparable direct spaces, so Landlords are trying to compete with expanded concession packages (rent abatement, TI allowances, and furniture allowances). As vacant subleases continue to expire (1.9M SF set to expire by the end of 2022), expect more direct space to come online. Notably, Salesforce, Stripe, and Twilio marketed spaces for sublease in the quarter.
Sublease rents in the market are discounted up to a 40% discount versus comparable direct spaces, so Landlords are trying to compete with expanded concession packages (rent abatement, TI allowances, and furniture allowances). As vacant subleases continue to expire (1.9M SF set to expire by the end of 2022), expect more direct space to come online. Notably, Salesforce, Stripe, and Twilio marketed spaces for sublease in the quarter.