Thursday, October 8, 2020

State of play: US commercial real estate 3Q20

State of play in commercial real estate across six key US cities courtesy of Savills. All 3Q20 data except for Dallas where I used 2Q20 data.

Some observations:

  1. Leasing activity fell like a rock as expected. Deep freeze in SF while Manhattan's drop was surprisingly the lowest in the peer set.
  2. While asking prices did not weaken more than you'd imagine, the sublease share of available inventory in SF (52%) and Manhattan (27%) has gotten, um, substantial.
  3. I'm frankly surprised at LA's performance given the state's covid lockdowns. Of course, it's hard to generalize given the heterogeneity of the market.
  4. Dallas, and Houston to a lesser extent, seem to be the overachievers in this peer set. Anecdotally, I've seen less of a discontinuity in commercial development in DFW. There have even been a number of new restaurants that recently opened.


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