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  • Writer's pictureRealFacts Editorial Team

US Office Outlook - Q1 2024

Large conference room

JLL released their Q1 US Office Outlook on Tuesday and found that “Demand recovery continues, but occupancy losses persist as occupiers evolve.” The report outlines the current mixed bag of data in the sector.

According to the report, occupiers are continuing to trim space, but that hasn’t totally crippled the office space. This is because only 30,000 s.f. of new supply has broken ground in the last three months hitting a record low. This diminishing supply will help in finding a market equilibrium. Office space has also seen positive signs in all office-using job sectors adding employment over the past three months.

Graph of groundbreakings by year

Inventory removals are another factor pushing supply and demand to equilibrium. In the past three years, inventory removal has set record highs nationally. The report states that “relative outperformance of multi-housing in recent years, shifting allocations among core capital providers, a greater volume of office trades priced below replacement value, and most notably a slew of new local incentives targeted at spurring office-to-residential conversions has led to the acceleration.”

Graph of inventory removals

JLL sees office leasing continuing to improve through the rest of the year with a return to 80%-90% of pre-pandemic leasing activity. They also expect that inventory will continue to decline through the next two or more years at a gradual pace.

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