Mixed-use submarkets showing resilience despite broader office slowdown
August 31, 2023
- Areas with a more diverse distribution of property types among commercial, residential and entertainment uses have seen more resilient demand and a general sense of heightened vibrancy that has driven a rising profile within their markets during the pandemic.
- Off-core mixed-use submarkets tend to depart from the dominance of office in the broader CBD: in Chicago, Boston, San Francisco and Washington, DC CBDs are comprised by over 70% office space, while mixed-use submarkets in those metros average just 58% of space dedicated to the office sector.
- Submarkets with mixed-use or destination characteristics saw a less acute slowdown in office leasing volume as they have grown to capture a greater share of market-wide leasing. As a result, these markets have seen occupancy gain during the pandemic, and tend to have marginally lower vacancy rates than the remainder of the market despite a high volume of new construction adding supply consistently.