Bright Spots of the Office Sector
17 Nov 2022
After more than two years since the beginning of the pandemic, over 50 percent of the office-using employees are still spending most, if not all, of their working days at home. The office, once an undisputed necessity, has become a pandemic luxury at least for some of the well-established tech markets located along the coast. As landlord and investors closely monitor and assess the future of office, Moody’s Analytics developed tools to rank each metro’s performance and future prospect using trend and forecast data. The results show many bright spots that are creating positive momentum and shining lights into the future of the office space.
The Performance Index is designed to measure a metro’s office sector performance (effective rent growth and vacancy changes) compared to its own performance history and cross-metro performances. As shown in Table 1, four Midwest metros — Wichita, Omaha, Dayton, and Indianapolis — secured top-10 spots in the third quarter of 2022. In general, firms in the Midwest are benefiting from lower salary levels and office rent as compared to other regions. Wichita ($12.15/sq. ft.) and Dayton ($11.95/sq. ft.) offer the lowest office effective rent among our 82 primary metros, and all four are among the most affordable places for employees to live.