Madison Street Beat
A look at key metrics for Madison’s Office Space Market – Q4 2020
MADISON STREET BEAT–Q4 2020
Like most business segments, 2020 was a volatile year for commercial real estate. The year started with high optimism, but the COVID 19 pandemic had an uneven impact on demand for CRE space with greater effects on office and retail with less or no effect on multifamily and industrial.
Occupancy rates were increasing at the start of 2020 but ended at the same level as 2019. While a growing number of businesses began bringing employees back to the office in Q4, others are using work remote or hybrid models until they can determine how to best support employees’ wellbeing and address COVID and Covid-19 vaccine concerns. A low quantity of new office supply contributed to occupancy rates that were kept relatively stable.
Sales volume continues to remain low in Q4 2020 as the disconnect in the market between buyers and sellers persists. Buyers continue to search for deals, being cautious not to overpay, while sellers are reluctant to sell, as the pandemic’s impact to commercial real estate is yet to materialize. Notably, Compass Properties’ sale of High Point Office Center for $2.425M in October ’20 was Madison’s top office transaction of Q3/20 and third largest office sale of the year.
