Large-block availabilities are diminishing, even as vacancy continues to rise

February 05, 2024
  • Jacob Rowden
  • Elena Lanning
  • The acceleration of large-block leasing activity in Q4 2023 has begun to shift conditions in the market for occupiers, as contiguous availabilities over 100,000 s.f. are now declining.
  • Though vacancy continues to rise, the number of buildings with over 100,000 s.f. of contiguous vacancy has started to decline and the share of fully leased office buildings is increasing.
  • Even though large blocks are beginning to lease up, office vacancy remains highly concentrated in inferior assets, with 10% of buildings comprising 60% of national vacancy—this continues to intensify, with 52 additional buildings becoming fully occupied in the past three months.
  • The return of large-scale leasing drove 14% QoQ growth in U.S. office leasing to end the year and appears to have some momentum at the beginning of 2024: a technology tenant signed a lease for over 500,000 s.f. to occupy the entirety of Skanska’s “The Eight” development in Bellevue in recent weeks.
  • Large-scale leasing has not exclusively taken place in Trophy and new construction buildings, with some cost-conscious groups targeting aging Class A or Class B buildings – earlier this year the Archdiocese of New York signed a lease to relocate into over 140,000 s.f. at 488 Madison Avenue in Manhattan.