Page 13 - Market Trends_Mid Year 2021_Advantage Commercial Real Estate_Flipbook_Neat

2021 MID-YEAR MARKET TREND REPORT 13
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2021 MID-YEAR MARKET TREND REPORT

$22.28 WEIGHTED AVERAGE
CBD
Mod. Gross LEASE RATE

$16.13 WEIGHTED AVERAGE
SUBURBAN
Mod. Gross LEASE RATE

OFFICE EMPLOYERS WHO FEEL EMPLOYEES

SHOULD BE IN THE OFFICE
MARKET 84% AT LEAST 2 DAYS

A WEEK

Building at 648 Monroe Avenue NW but also has more extremely rare. Why is this? Construction costs are still
than 25 leases spread throughout the city. Spectrum is prohibitive, lead times to get materials and labor are
a shining example of what the new normal will likely currently unpredictable, developable land is expensive
look like. While uncertainty is still prevalent, Spectrum is and rare, and there is vacant space still on the market;
in the process of consolidating their leases from across although quality options are becoming harder to find.
the city into a new Center for Transformation being
built on North Monroe Avenue. The development will The “new normal” is unfolding in front of our eyes,
house 1,200 employees and is expected to save more however the office market has not fully recalibrated yet.
than $15 million in annual rent. In addition, Spectrum Lease rates will likely remain flat and transaction activity
has committed to offering flexible work options for should be constant going forward, but with no major
these employees, so they can take advantage of the acceleration. Businesses looking to relocate within the
innovation and collaboration taking place at the new suburbs now have proximity to their employee base
campus yet maintain some work mobility if desired. to factor into decision making, as workers’ schedules
become less formal. There is also still a hint of uncertainty
Throughout the latter half of 2021, we expect to see towards how hybrid working will play out and what
more companies adjust to this new normal and follow that means for office space. We anticipate early this
Spectrum’s lead by “right-sizing”, creating spaces that fall, once federal assistance goes back to normal and
attract and retain employees, and offer at least some children are back in school, that the market will settle in,
form of flexibility with work schedules. and we’ll get a clearer view.

Besides a few larger projects downtown - like Spectrum,
Perrigo, and Acrisure - new office construction has been