The office sector's share of total U.S. real estate sales volume has trended downward since 2017 as the allocation to industrial and apartment assets accelerated. And like so many other things, COVID-19 only accelerated this trend, with office’s share of total sales volume falling to 21% in Q3 2021, down from 27% at the beginning of 2020.
As the concern surrounding virtual work is paramount, investors have increasingly preferred fully occupied office properties. In recent months there has been more appetite for value-add or opportunistic investments but the market for office vacancy remains thin.
The upshot is that recent sales comps are overstating the market.
NOTE: the data is based upon a four-quarter rolling average.