Q3 office leasing activity increased by 3.3% quarter-over-quarter and 19.4% year-over-year to 49 million sq. ft.
Negative net absorption totaling 5.2 million sq. ft. in Q3 was the lowest negative amount since the start of the downturn in Q2 2020.
The bellwether markets of Manhattan, San Francisco, Seattle, Austin and Atlanta led the improvement in Q3 with varying rates of positive net absorption and significant swings from negative demand earlier this year.
The overall vacancy rate increased by 30 basis points (bps) to 16.8%, its highest level since 2010. However, the amount of the vacancy increase in Q3 was the smallest since Q1 2020.
The average asking rent increased slightly in Q3 to $34.72 per sq. ft. but landlord concessions rose to record levels in many markets.
The sublease availability rate fell to 3.7%—the first decrease since Q2 2019.
The office occupancy rate reached its highest level (36.2%) since the pandemic began, according to Kastle Systems data.