Q1 2023 U.S. office market overview
Key findings from Avison Young’s Q1 2023 U.S. market overview include:
- Leasing activity slowed to the second-weakest amount since 2001, -42.2% from 2001 to Q1 2020 and -27.5% from post-COVID averages.
- Flight to quality remains pronounced, especially in markets such as Manhattan (+28.4%) where new construction demand is strong.
- Sublease availabilities increased to a new record in Q1 2023, more than doubling from Q1 2020 levels as tenants continue cost containment efforts.
- Tenant leverage has accelerated in U.S. gateway markets, with landlords offering more generous free rent periods and tenant improvement allowances.
- Tenants have refocused on sustainability, especially in a supply-rich market. LEED Platinum offices have consistently outperformed peer properties.