The Buffalo office market has taken a hit from the COVID pandemic according to a market analysis by CBRE Buffalo. The overall office vacancy rate rose from 12.0 percent at the end of 2019 to 13.5 percent at the end of last year. Nationally, the overall vacancy rate is 14.0 percent.
The local office market incurred a negative net absorption of 280,950 sq.ft. last year with the North and East suburbs taking the largest shifts in occupancy. Leasing velocity has slowed with an increase in dispositions and sublease inventory on the rise. According to CBRE Buffalo, job losses and the overall shift to remote work has caused many office tenants to reimagine their workspace. Many tenants are seeking interim solutions and taking a wait-and-see approach until the effects of a vaccine and post-COVID environment are clear.
Downtown, the overall office vacancy rate is 13.8 percent. Class A office product held nearly steady with a slight uptick to 11.5 percent vacancy while posting a positive net absorption of 19,326 sq.ft. For Class B office space was 16.6 percent vacant with a net absorption of 87,032 sq.ft. Of the 9.4 million sq.ft. of downtown Class A and B space, 1.3 million square feet is available for lease.
On the construction horizon, redevelopment of the AM&A’s building would include office and residential space, redevelopment of the Main Place Mall would convert much of the retail and server space to offices, and Ellicott Development’s renovation of 478 Main Street will include office space, much of it pre-leased to government tenants.