Continued Uncertainty Dampens Office Market Sentiment

The continued persistence of the COVID-19 pandemic has reversed the previously optimistic trajectory of the office market as a return to the workplace for many employees continues to be delayed. With investors becoming more cautious due to the increased uncertainty about near-term economic prospects, the optimism for the office market in the previous Survey shifts to a downturn in Southern California, with a more neutral view in Northern California. Office development sentiment has remained slightly optimistic in the Bay Area, though there are not yet plans in place to increase the rate of development. Though the return to the office has been delayed, there are signs that this pessimism is temporary—companies will ultimately put into place plans to return their workforce to the office, and there will eventually be a need for new office development that will provide for this new office landscape.

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