{"id":1004548068,"date":"2021-01-27T05:47:00","date_gmt":"2021-01-27T13:47:00","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004548068"},"modified":"2022-12-08T10:01:56","modified_gmt":"2022-12-08T18:01:56","slug":"where-office-sales-volume-shot-up-last-year-irr","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/where-office-sales-volume-shot-up-last-year-irr\/","title":{"rendered":"Where Office Sales Volume Shot Up Last Year: IRR"},"content":{"rendered":"
\"\"<\/a>

Image by XPS via Unsplash<\/p><\/div>\n

Columbus, Ohio, Raleigh\/Durham, N.C., and Memphis, Tenn., were the biggest winners for office transaction volume last year<\/a>, according to the latest report from Integra Realty Resources.<\/p>\n

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READ ALSO<\/strong>: Vaccine to Trigger Q3 CRE Recovery: Report<\/a><\/p>\n

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And as the year rolls forward, only Austin, Texas, Indianapolis, Charlotte, N.C., and Nashville, Tenn., are expected to experience expansion, which is defined by the report as decreasing vacancy rates, moderate\/high new construction, moderate\/high employment growth and medium\/high rental-rate growth.<\/p>\n

The nation\u2019s office markets are \u201cin an interstitial space characterized by uncertainty, fluidity and a wide range of choices.\u201d Few, if any, would disagree, and the IRR report yields some acute observations (and implicit predictions, perhaps) based on input from the company\u2019s 50-plus offices nationwide.<\/p>\n

One observation is an apparent contradiction. Central business districts, with deep market advantages from mass transit, abundant dining options, entertainment venues and walkable residential possibilities, saw these amenities \u201csuddenly and severely compromised,\u201d IRR notes.<\/p>\n

This in turn has spurred \u201cmuch discussion of migration to the South and to suburban-dominated metros in general,\u201d the report says. Nonetheless, the South (from east\u00a0Texas through Virginia) saw the largest year-over-year increase in vacancy. Class A property availability rose 396 basis points, and Class B property vacancy in the region jumped by 544 basis points.<\/p>\n

Further, a fourth-quarter survey by Integra revealed \u201cat least two salient and surprising findings.\u201d One is that the national office market is marked by a \u201cflight to quality,\u201d rather than a \u201cflight to cost-advantage.\u201d<\/p>\n

Second, while office space users are struggling with the pandemic\u2019s effects, \u201cthe investor-market has moved en masse to the sidelines, making it difficult, if not impossible, to generalize from thin transaction data to the broad impacts on asset pricing looking forward into 2021.\u201d<\/p>\n

IRR cites Real Capital Analytics data showing that the pandemic shrank office transactions by 44 percent from January through October, leaving office investors in a position to be cautious about drawing firm conclusions from survey data.<\/p>\n

Still thriving, for now<\/h2>\n

But there are some areas of consensus. An assessment of where 65 office markets are with respect to the office market cycle shows zero metros in the space between Recovery and Expansion (where normally there would be at least some strong markets with good immediate prospects) and only the above-mentioned four metros\u2014Austin, Indianapolis, Charlotte and Nashville\u2014are in some phase of expansion.<\/p>\n

The same chart finds 27 markets in Recession and 21 others in hypersupply, which could suggest \u201cnear-term deterioration,\u201d according to IRR.<\/p>\n

Besides Columbus, Ohio, Raleigh\/Durham, N.C., and Memphis, Tenn., the Top 5 metros (of 54) for the highest office transaction volume also included Westchester County (N.Y.) and Sacramento, Calif. The five hardest hit are Long Island, N.Y., East Bay and San Jose in California, Richmond\/Norfolk, Va., and (oddly, perhaps) Austin, Texas, in the bottom position.<\/p>\n

IRR concludes that the current situation is probably not the usual, understandable real estate cycle, but perhaps a \u201cnon-linear\u201d dislocation, a \u201cblack swan\u201d event.<\/p>\n

\u201cIf that is so,” according to the report, “the pattern of the future may require a transformative change in the physical, operational, and financial aspects of the office markets, rather than a comforting return to normalcy,\u201d even after vaccination levels are high enough.<\/p>\n","protected":false},"excerpt":{"rendered":"

Only a relative handful of metro areas are in an expansion mode, according to a new report from Integra Realty Resources. <\/p>\n","protected":false},"author":882,"featured_media":1004548069,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[23891,21742,21747,51037],"tags":[48950,36149,34748,34006],"class_list":["post-1004548068","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-national","category-latest","category-office","category-trends","tag-coronavirus","tag-hugh-kelly","tag-integra-realty-resources-inc","tag-real-capital-analytics"],"acf":[],"yoast_head":"\nWhere Office Sales Volume Shot Up Last Year: IRR - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/where-office-sales-volume-shot-up-last-year-irr\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Where Office Sales Volume Shot Up Last Year: IRR\" \/>\n<meta property=\"og:description\" content=\"Only a relative handful of metro areas are in an expansion mode, according to a new report from Integra Realty Resources.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/where-office-sales-volume-shot-up-last-year-irr\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2021-01-27T13:47:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-08T18:01:56+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/08\/Image-by-XPS-via-Unsplash.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/where-office-sales-volume-shot-up-last-year-irr\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/where-office-sales-volume-shot-up-last-year-irr\/\",\"name\":\"Where Office Sales Volume Shot Up Last Year: IRR - 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