{"id":41253,"date":"2024-11-14T07:50:45","date_gmt":"2024-11-14T04:50:45","guid":{"rendered":"https:\/\/www.commercialcafe.com\/blog\/?p=41253"},"modified":"2025-11-17T16:11:14","modified_gmt":"2025-11-17T13:11:14","slug":"q3-2024-office-markets-report","status":"publish","type":"post","link":"https:\/\/www.commercialcafe.com\/blog\/q3-2024-office-markets-report\/","title":{"rendered":"Q3 2024 Office Markets Report: Examining Key Trends in the 100 Largest Office & Coworking Markets"},"content":{"rendered":"
[vc_row][vc_column][vc_column_text css=””]As the U.S. office sector continues to navigate the complex, post-2020 landscape, it evolves under the influence of shifting economic winds, changing work trends, and the need to refresh a significant portion of the national office stock. While general discourse in the face of headwinds tends to lament the future of office space, the sector itself has historically adapted to changing dynamics and bounced back stronger.<\/p>\n

Even as this particular round of headwinds feels unprecedented in scale and character, the U.S. office sector is perhaps more likely than ever to adapt creatively to currents such as shifting workforce paradigms, evolving space requirements, highly dynamic global trends, breakneck technological advancements, and economic correction[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=”.vc_custom_1730357352817{border-top-width: 3px !important;border-right-width: 3px !important;border-bottom-width: 3px !important;border-left-width: 3px !important;padding-top: 10px !important;padding-right: 10px !important;padding-bottom: 10px !important;padding-left: 10px !important;background-color: #e8e8e8 !important;border-left-style: none !important;border-right-style: none !important;border-top-style: none !important;border-bottom-style: none !important;}”]In order to keep up with evolution in the industry, we set out to capture key performance trends across the 100 largest office markets in the U.S. in a series of quarterly ranking reports that compare and score markets across several metric categories \u2014 vacancy, pipeline, asking rates, evolution of the coworking space segment, upcoming loan maturities, and quarterly shifts in online searches for both traditional and flexible office space.<\/p>\n

See the methodology section<\/a> for details and read on for highlights of the best-scoring markets, followed by a breakdown of the ranking report by metric category.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=””]\n

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Despite changes in the debt economy resulting in more distressed assets showing up and acceptance of changes in office use spreading on a wider scale, we expect the office sector to come up with creative and ingenious ways to handle the higher-vacancy early phases of what is likely to be a reshuffling spreading multiple decades.<\/em><\/p>\n

Peter Kolaczynski, Director, Yardi Research<\/strong><\/p>\n<\/blockquote>\n[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=””]\n

Key Takeaways<\/span><\/h2>\n

Top 10 Office Markets in Q3<\/span><\/h3>\n
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  • Boston bags top scores for vacancy, pipeline and asking rates to rank #1 in Q3 2024 among office markets larger than 100 million square feet. San Diego and Orange County complete the podium.<\/li>\n
  • Miami\u2019s office development pipeline propels the market to the top of the chart for entries smaller than 100 million square feet. It\u2019s followed by the West Palm Beach-Boca Raton, Fla., and Inland Empire, Calif., office markets.<\/li>\n<\/ul>\n

    Top Scores for Each Ranking Metric Category (jump to section<\/span><\/a><\/span>)<\/span><\/h3>\n
      \n
    • Vacancy:<\/strong> Nearly 20 office markets saw a quarter-over-quarter drop in vacancy, but none marked a decrease greater than 3%.<\/li>\n
    • Asking rent:<\/strong> More than half of the 100 office markets we compared saw an increase in average asking rent from Q2 to Q3.<\/li>\n
    • Office construction:<\/strong> Pipeline data showed more than 102 million square feet added across the 100 largest markets during Q3. Austin, Texas, boasts the largest pipeline under construction in Q4.<\/li>\n
    • Coworking space:<\/strong> The local coworking scene expanded during Q3 2024 in nearly 85% of the markets we compared.<\/li>\n
    • Loan maturities: <\/strong> Austin, Texas; the Bay Area; and San Diego are looking at the lowest percentages of loans maturing in 2024.<\/li>\n
    • Search trends: <\/strong> Year-over-year online search trends show steady interest in both coworking and office space.<\/li>\n<\/ul>\n[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=”.vc_custom_1730359152541{padding-top: 1px !important;padding-right: 5px !important;padding-bottom: 20px !important;padding-left: 5px !important;background-color: #0bbfeb !important;}”]\n

      Top 10 Office Markets Larger Than 100M Square Feet<\/span><\/h2>\n[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=””]\n

      We still see significant post-2020 fluctuations in market fundamentals across the U.S. office sector. Most notably, very dynamic leasing rate trends due to large amounts of space moving online and offline, in conjunction with changes in how office space is being marketed. What\u2019s more, new project deliveries disproportionately affect both asking rate averages and vacancy rates, all of which support the expectation to see greater fluctuations than we were previously used to, both year-over-year and even from one quarter to the next.<\/p>\n

      Peter Kolaczynski, Director, Yardi Research<\/strong><\/p><\/blockquote>\n[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=””]With a total of nearly 78 points out of 100,\u00a0Boston scored best among the larger office markets <\/strong>we analyzed. In fact, the Massachusetts powerhouse stood out for several metrics, including pipeline, vacancy, and asking rates. Although Boston office space<\/a>\u00a0was not spared by the nationwide trend of vacancies, it nevertheless presented the second-lowest Q3 vacancy rate in this group. And, with more than 13 million square feet of office space added during this year\u2019s third quarter, Boston boasted the largest deliveries pipeline. Furthermore, developers here had nearly as much under construction at the start of Q4, which amounted to nearly 4% of stock that\u2019s currently in the works.<\/p>\n

      The market also claimed the highest score for its year-over-year increase in average asking rent, which was partially the result of continuing flight to quality: Tenant interest remains notably concentrated on best-in-class assets, which ask for higher asking rates.<\/p>\n

      San Diego claimed the second-highest score in the large markets ranking<\/strong>, earning notable performances across several of the metrics we compared. Specifically, in Q3 2024, the California market added the third-most office space as a percentage of stock (nearly 4%). Similarly, the\u00a0 under-construction pipeline of San Diego office space<\/a> also represented the third-largest market expansion in development at the start of Q4 among the larger markets in our ranking.<\/p>\n

      Orange County ranked third among the larger markets in Q3 2024.<\/strong> During the last quarter, the second-highest-scoring California entry had the fifth-lowest vacancy rate; attracted the second-highest year-over-year increase in the average monthly online searches for office space; and earned the fifth-best score for increase of asking rates throughout 12 months.<\/p>\n

      \"best<\/a><\/p>\n\n

      Next, Manhattan scored fourth-best among the larger markets in Q3 2024.<\/strong> The market\u2019s strongest suits were vacancy, online interest in office space, and loan maturities. Manhattan office space<\/a> had the third-lowest vacancy rate last quarter and attracted the third-highest 12-month increase in monthly online searches. At the same time, office loans maturing represented 4.6% of the total for the fifth-highest score for this metric.<\/p>\n

      Then, as the last of three California office markets to make the top 10,\u00a0LA rounded out our top five in Q3<\/strong>. The vacancy rate for office space in Los Angeles<\/a> was the lowest among entries larger than 100 million square feet. The City of Angels was also the office market to see the largest decrease in vacancy from the previous quarter.<\/p>\n

      On the opposite coast, Philadelphia earned the sixth-highest score\u00a0<\/strong>among the larger markets by standing out for several indicators: Office space in Philadelphia<\/a> saw the sixth-highest year-over-year increase in average asking rent; the sixth-largest market expansion as a percentage of stock (nearly 2%); the seventh-most office space added between July and September 2024; and the seventh-lowest vacancy rate in Q3.<\/p>\n

      Meanwhile, Washington, D.C. took seventh place in Q3<\/strong>. Its best-scoring metrics include vacancy (the sixth-lowest rate in Q3) and a boost to the local coworking scene with the fourth-most coworking space square footage added among the larger markets in our ranking.<\/p>\n