U.S. Capital Markets Glide Path to Clearer Skies

Higher end office product will still attract debt Pricing, vacancy and leasing performing better for top tier

Top Quality Buildings Share of Leasing

Vacancy Rates, by Building Star Rating Office Price/SF Index (2019Q4=100)

5 Star Share of Leasing, 4-Qtr Rolling

Highest-End Product Lowest-End Product

3 Star & Below 4 Star

5 Star

14%

26%

120

2023 Gap >700 bps

110

13%

22%

100

2019 Gap <250 bps

12%

18%

90

80

11%

14%

70

10%

10%

60

2015

2016

2017

2018

2019

2020

2021

2022

2023

2018 Q1

2018 Q3

2019 Q1

2019 Q3

2020 Q1

2020 Q3

2021 Q1

2021 Q3

2022 Q1

2022 Q3

2023 Q1

2001 Q1

2003 Q1

2005 Q1

2007 Q1

2009 Q1

2011 Q1

2013 Q1

2015 Q1

2017 Q1

2019 Q1

2021 Q1

2023 Q1

39

Source: CoStar, MSCI Real Capital Analytics, Cushman & Wakefield Research