Real Estate Information from around the globe.
Real estate refers to land, as well as any physical property or improvements affixed to the land, including houses, buildings, landscaping, fencing, wells, etc.
Personal Finance - Financial planning generally involves analyzing an individual's or a family's current financial position, and formulating strategies for future needs within financial constraints. Personal finance is a very personal activity that depends largely on one's earnings, living requirements, goals and individual desires.
M A R K E T B E AT
COVID-19 Impacts U.S. Office Leasing Fundamentals in Q2; Absorption Turns Negative, Vacancy
Economy: The global COVID-19 pandemic struck the U.S. in March 2020, too late to have a significant impact on the first
quarter’s office leasing metrics. The U.S. economy felt its full effects in the second quarter of 2020 as government-
mandated shutdowns, along with shelter-in-place ordinances, pushed the country into a severe recession. The U.S. lost a
record 20.8 million jobs in April 2020, by far the largest job loss in history. Office-using employment, a key driver of
demand for office space, declined by 2.7 million that same month. Since then, as the lockdowns ended and the U.S.
economy began to reopen, millions of furloughed workers have been called back to work and the employment data has
improved. In May and June, the U.S. economy regained about one-third of the total number of jobs lost in April.
However, it is generally assumed that as the virus lingers it will continue to result in sluggish growth. Thus, as the
pandemic continues to impact consumer and business demand, it is also assumed that many of the job losses that
occurred earlier in the year will ultimately become permanent.
Demand: Given the severe blow to the labor markets, it is not surprising that the office leasing environment was
also impacted this quarter. Net absorption dropped from +5.2 million square feet (msf) in the first quarter to -22.8
msf in the second quarter. This was the largest quarterly decline in net demand for office space since the second
quarter of 2009 during the Great Recession. While every region of the country recorded negative absorption, the
West region experienced the lowest net demand, where markets such as San Francisco (-2.8 msf), Phoenix (-1.9
msf) and Los Angeles (-1.3 msf) saw the largest declines. Other notable drops in absorption outside of the West
region occurred in Manhattan (-1.9 msf) and Dallas (-1.8 msf). A total of 65 office markets logged negative