More workers are back in the office today, at least on a part-time basis, than you might think. According to the third quarter U.S. Office Outlook from JLL, 47% of workers were back in the office in some capacity in the third quarter. That’s a post-pandemic high.
It’s also an improvement. JLL reported that at this time last year, only 35% of workers were back in the office. JLL predicts that by the first quarter of 2023, 65% of workers will be back to the office, at least in a hybrid mode.
Other news in JLL’s report, though, wasn’ as positive. According to JLL, only 45.5 million square feet of office leases closed in the third quarter of this year. That’s down 3.6% from the second quarter. JLL pointed to a slowdown in the amount of tech leases for this drop-off.
Companies are still uncertain about the future, too, which has led to shorter office leases. JLL reported that the average lease term was 6.2 years in the third quarter. The average office lease term had grown to 9.1 years during the past 12 months before this drop.
Overall office vacancy rates continue to rise, increasing by 20 basis points in the third quarter to 19.1% nationally.
When tenants are moving into new space, more of them are looking for higher-quality space. This flight-to-quality has created 1.7 million square feet of positive net absorption in trophy-quality office space.