According to Commercial Edge, Denver’s average office listing rental rate of $30.22 psf is a pretty good deal compared to the National average of $37.64 psf, a discount of 24%. Manhattan was the highest at $70.00 psf with Detroit at the lowest at $21.34 psf.

U.S. Office Market Closes 2023 With $34 Billion in Sales, 60% Below the Volume Recorded in 2022  

By EVELYN JOZSA

Key Takeaways:

  • The average U.S. office listing rate stood at $37.64 per square foot, down 1.4% year-over-year  
  • Up 180 basis points over year-ago figures, the national vacancy rate reached 18.3% at the end of December
  • There were 96.9 million square feet of office space under construction, accounting for 1.4% of existing stock 
  • Office sales totaled $33.8 billion through 2023, with assets trading at $196 per square foot 
  • San Francisco asking rents fell 7.8% year-over-year in December to an average of $61.91 per square foot
  • Chicago recorded the largest sales volume in the Midwest in 2023, totaling $1.14 billion 
  • With 5.4% of its stock under construction, Austin continued to lead development in the South
  • Manhattan’s average sale price per square foot remained the highest nationwide, reaching $783 in 2023

The office sector has traveled a rocky road since the pandemic, and 2024 will likely be another painful year. However, this year will likely bring the sector closer to an eventual post-pandemic status quo, our latest U.S. office market report projects.

In 2024, we anticipate office utilization rates will slowly creep up, even if a full-scale return will never materialize. Return-to-office mandates have been more common in recent quarters, with large firms such as Amazon, Meta and Zoom announcing policies around working in the office.

Yet even among firms that have moved to require in-office attendance, most are embracing hybrid work schedules and downsizing office footprints. Many companies are settling around two to three days a week of in-person work, and we anticipate that the physical occupancy rates will not see a major uptick from last year. We also expect the effect of hybrid and remote work will continue to decrease the prevalence of long-term fixed leases, with flexibility remaining important to tenants.

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