COVID-19’s second wave extends remote working; activity down 29.2% from 2019

The resurgence of COVID-19 infections extended remote work and caused recently reopened offices to shut down. In December, the United States government approved two COVID-19 vaccines and pharmaceutical companies began distribution. However, it will take months for most of the country’s population to be inoculated which could potentially extend remote working well into next summer. As a result, some tenants are hesitant to execute major real estate transactions until the pandemic passes while others have contemplated adopting increased flexibility into future plans. In what is hopefully a positive sign of things to come, fourth-quarter leasing activity (906,661 square feet (sf)) increased 47.3% from the prior quarter, however 2020’s total (5.3 million square feet (msf)) was 29.2% less than the annual total in 2019. Notable transactions signed during the fourth quarter included Blank Rome's estimated 196,000-sf renewal at 130 N 18th Street and the United States Army Corp of Engineers’ 103,000-sf lease at 1650 Arch Street, both in West Market. Securing flexibility in today's tenant-favorable market, Blank Rome has the option to contract size before its new lease takes effect.

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