Data for the fourth quarter showed a widespread deterioration in occupier demand in all three sectors. This was worst in some of the big six and West coast metros, with markets like Phoenix, Portland and San Jose joining San Francisco and Chicago in reporting poor absorption numbers. On the other hand, Atlanta, Austin and Miami remain amongst the better performers in terms of occupier demand. Though, with yield rises now gathering pace, those rental differentials are likely to be outweighed by a severely negative yield impact, which will drive capital values lower across the board over the next few quarters, adding to the losses seen in Q4 2022.
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