2020 Q3 Office Columbia Report

No major shifts confirm Columbia office stability amid pandemic

Key Takeaways

• Overall office market occupancy barely moved this quarter. The few changes within Columbia’s offices show tenants are maintaining their current office.
• Some tenants are choosing to renew their leases for shorter terms to see the impact of COVID-19.

Columbia office tenants are creating marginal activity

Tenants within the Columbia office market executed renewals for shorter terms in the third quarter than were previously being negotiated. Nevertheless, they are still leasing space. Overall, the market absorption is slightly negative. However, Columbia is weathering the anticipated storm of negativity caused by the pandemic. The activity is minimal, but the market has not taken a nosedive. The activity is described more accurately as lethargic. There are deals in the process of negotiation. However, it is a slower process than before the pandemic because it is still tainted with some uncertainty. In looking to the fourth quarter, leasing momentum should partially regain strength. 

Market Overview

Overall Columbia Market 

The Columbia office market is comprised of approximately 16.59 million square feet. The Columbia office market posted a negative absorption of 26,504 square feet which indicates minimal activity. While Class C office spaces absorbed 17,894 square feet, Class A and Class B posted negative absorption. In addition, sublease availabilities have doubled that of last quarter and now total 56,205 square feet. Landlords will likely have to temporarily lower some of their building rental rates in order to compete with the lower-priced sublease availabilities. As a result of the negative absorption this quarter, the overall market vacancy rate rose from 9.58% last quarter to 9.74% during the third quarter of this year. The overall market weighted full service rental rates averaged $18.11 per square foot. Class A office weighted rental rates averaged $22.14 per square foot.