Many occupiers have rightsized their office footprints, made progress on getting their people back to the office, and, according to a new CBRE survey, more of them are focusing their attention on growth.

This is born out in Q2 net absorption, which turned positive (+2.5 million sq. ft.) for the first time in nearly two years. The trailing-four-quarter trend is moving in the right direction as well.

However, investors will want to see more evidence of a turnaround in fundamentals before committing fresh capital to this sector. This means the market must digest the 33.5 million sq. ft. that is slated to complete over the next two years – a time when office-using job growth is expected to slow.

We forecast vacancies to top out at nearly 20% next year, coinciding with a peak in office cap rates.