{"id":1004741199,"date":"2024-12-19T07:26:48","date_gmt":"2024-12-19T15:26:48","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004741199"},"modified":"2025-02-25T02:22:48","modified_gmt":"2025-02-25T10:22:48","slug":"office-report-november-2024-commercialedge","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/office-report-november-2024-commercialedge\/","title":{"rendered":"Office Report: Office Sector Decline Continues Amid Flexibility Shift"},"content":{"rendered":"\n

The office sector’s transformation continued in 2024, shaped by pandemic-related shifts that have led to lower sale prices, less new development and a rise in coworking space, the latest CommercialEdge report shows.<\/p>\n\n\n

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Although companies like Amazon and Meta pushed for return-to-office policies, office usage increased only slightly in 2024. Image by TrongNguyen\/iStockphoto.com<\/em><\/figcaption><\/figure><\/div>\n\n\n

While the average sale price of offices dropped 9 percent year-to-date to $179 per square foot, the decline has slowed compared to last year’s 24 percent drop. Additionally, the number of discounted office sales increased<\/a>, with 480 transactions through November, already surpassing the 389 discounted sales recorded in all of 2023.<\/p>\n\n\n\n

As demand for office space remains sluggish and vacancy rates rise, construction activity has continued to slow. By November, only 9.1 million square feet of office space began construction this year. Developers, especially in the life sciences sector, have pulled back due to a supply glut and reduced investment. After more than 30 million square feet of lab space broke ground between 2021 and 2023, only 948,000 square feet began construction in 2024.<\/p>\n\n\n\n

Meanwhile, coworking space expanded<\/a>, growing by 7 percent in number and 4 percent in square footage as companies sought more flexible office solutions, according to CommercialEdge. Despite high-profile return-to-office announcements from Amazon, Meta and others, office usage metrics saw only modest increases.<\/p>\n\n\n\n

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READ ALSO:<\/strong> How Flight-to-Quality Is Leading the Flex Office Evolution<\/a><\/p>\n\n\n\n

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Office-using employment sectors added 43,000 jobs in November, marking a 0.4 percent increase from the same time last year. Most of these gains came from the professional and business services sector, which grew by 26,000 jobs. Financial activities added 17,000 jobs, achieving its largest monthly increase of the year, while the information sector remained unchanged. Metro-level data for October\u2014which lags national reports\u2014showed that six of the eight metros with positive office employment growth were in the Sun Belt.<\/p>\n\n\n\n

The national office vacancy rate rose to 19.4 percent by the end of November, an increase of 120 basis points compared to the same period in 2023, according to CommercialEdge. Over the past year, six markets saw vacancy rates rise by more than 500 basis points. Austin recorded the largest increase, climbing 650 basis points, followed by Boston at 630 basis points and Portland, Ore., at 620 basis points.<\/p>\n\n\n\n

National full-service equivalent listing rates averaged $32.85 per square foot in November, reflecting a modest six-cent rise from the previous month and a 3.7 percent increase year-over-year. Manhattan posted the highest rates, at $68.87 per square foot, followed closely by San Francisco at $68.81. Other top markets included the Bay Area ($54.04 per square foot), Boston ($53.35 per square foot) and Miami ($52.84 per square foot).<\/p>\n\n\n\n

Office pipeline shrinks below 60 million sq. ft.<\/h2>\n\n\n\n

The office construction pipeline continues to shrink steadily, with 57.8 million square feet underway as of November\u2014just 0.8 percent of the total inventory, according to CommercialEdge. This marks a decline of 3 million square feet during the month and nearly 39 million square feet since the start of the year. The contraction has been consistent throughout 2024, averaging a reduction of 3.5 million square feet per month.<\/p>\n\n\n\n

A total of 39.7 million square feet of office space was delivered this year, while only 9.1 million square feet entered the construction phase. Boston led the nation in office construction, with 9.2 million square feet underway, accounting for 3.6 percent of its total inventory. San Francisco followed with 3.8 million square feet under construction, representing 2.3 percent of its stock. Austin reported 3.6 million square feet in progress, or 3.7 percent of its total inventory.<\/p>\n\n\n\n

San Diego had 3.1 million square feet under development, equivalent to 3.2 percent of its stock, while Dallas reported 3.0 million square feet under construction, making up 1.1 percent of its inventory. At the same time, Manhattan had over 2.7 million square feet underway, or 0.6 percent of its total stock.<\/p>\n\n\n\n

Office investment reached $32.6 billion year-to-date through November, with an average sale price of $179 per square foot, according to CommercialEdge. Manhattan led the market with $3.8 billion in transactions, followed by Washington, D.C., at $2.5 billion and the Bay Area at $2.1 billion.<\/p>\n\n\n\n

Read the full CommercialEdge office report<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Here\u2019s how much construction and investment slowed in 2024, according to CommercialEdge data.<\/p>\n","protected":false},"author":741,"featured_media":1004741202,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[22251,23891,21747,37749,51037,52555,41267],"tags":[50674],"class_list":["post-1004741199","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-in-focus","category-national","category-office","category-research-center-cpe","category-trends","category-yardimatrix-office-reports","category-yardimatrix-reports","tag-commercialedge"],"acf":[],"yoast_head":"\nOffice Report: Office Sector Decline Continues Amid Flexibility Shift - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"Construction slowed in 2024, with 9.1 million square feet of office space breaking ground by November, according to CommercialEdge data.\" \/>\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\/office-report-november-2024-commercialedge\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Office Report: Office Sector Decline Continues Amid Flexibility Shift\" \/>\n<meta property=\"og:description\" content=\"Construction slowed in 2024, with 9.1 million square feet of office space breaking ground by November, according to CommercialEdge data.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/office-report-november-2024-commercialedge\/\" \/>\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=\"2024-12-19T15:26:48+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-02-25T10:22:48+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/12\/AustinTX_iStock-2177576582.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=\"Corina Stef\" \/>\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\/office-report-november-2024-commercialedge\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/office-report-november-2024-commercialedge\/\",\"name\":\"Office Report: Office Sector Decline Continues Amid Flexibility Shift - 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