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Record fall in passing rents highlights office weakness

The surprising strength of office market rents looks to reflect the increased use of incentives. Indeed, passing rents have seen a sharp decline, with all-office annual growth recently falling to a record low of minus 3.3%. Given an upcoming recession and the ongoing impact of remote work, we think market rents will soon follow passing rents down, ending 2024 at close to -1% y/y.   

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