Market Research Report
North America Office Real Estate Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)
|North America Office Real Estate Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)|
Published: April 28, 2022
Mordor Intelligence Pvt Ltd
Content info: 120 Pages
Delivery time: 2-3 business days
The Office Real Estate Market in North America is expected to register a CAGR of more than 4.5% during the forecast period.
The COVID-19 pandemic severely affected the office real estate market in North America, due to restrictions and social distancing policies and work from home culture. Now the market is in recovery phase, but not up to the pre pandemic levels. Furthermore, the growth of the sector is driven by increasing office space absorption, growth in leasing activities, construction of new office spaces, etc.
Furthermore, the United States is the major country in office real estate market in North America region, which contributes more than 9.1 billion sq. ft office inventory space in suburban and downtown regions. Where as, in Canada office market, growth was experienced in Class A office market with highest rate of available inventory and absorption rate.
The office market in North America received a hard hit by the pandemic. Now the market is recovering as significant growth observed in office absorption rate in the North America region. Furthermore, rental prices for office spaces are also witnessing positive growth after the pandemic crisis.
In addition, rental growths are high in Class A office spaces. In fourth quarter of 2021, the United States Class A office spaces rent was nearly USD 41.63 per square feet, which is 1.15 times higher than other class office space. Meanwhile, in Canada Class A office space rent was CAD 23.62 per square feet in third quarter of 2021.
Furthermore, overall office space sector is at positive growth rate in the United States regions. Northeast region is leading in rental growth in the country with more than USD 44.16 per square feet in Q4 2021, which is at a growth rate of 2% from the same quarter in 2020. Followed by West, South and Midwest regions. Meanwhile, in Canada, Vancouver and Waterloo Regions had experienced rental growth of 12% and 11.1% respectively.
Even thought office market is negatively impacted during the pandemic, now the market is recovering with significant growth in net office space absorptions, low vacancy rates, etc. Furthermore, as most of the office activities were nearly returning to pre pandemic levels, which is supporting the increasing demand new leasing activity.
Moreover, in the United States occupiers are concentrating on long-term office space leases in the market. In addition, in Q4 2021 total office space leasing was 29% higher than the same quarter 2020. Also, net absorption in Q4 2021 was 33% higher than the previous quarter and 75% above Q4 2020. Meanwhile in Canada, pre-leasing activity of under construction projects experienced growth. In addition, more than 61% of downtown under constructions were pre-leased by the occupiers in Q4 2021, as well as 25% of suburban under constructions were pre-leased in Canada.
Furthermore, different sectors are driving the demand for leasing activity, which includes technology services, financial services, health care or life sciences, manufacturing, Government, etc. Technology continues to be the top sector for leasing activity in North America region with more than 17% share in leasing activity, followed by financial services, and health care.
The report covers the major players operating in North America office real estate market. North America office real estate market is fragmented. Large companies have advantages in terms of financial resources, while small companies can compete effectively by developing expertise in local markets. Some of the major companies include Hines, Turner Construction Company, JBG SMITH Properties, Brookfield Asset Management Inc, etc.