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According to the WSJ, the US office market saw a significant increase in leasing activity in the first quarter of this year. Approximately 115 million square feet of space was leased, which represents a 13% increase from the previous quarter and the highest level since before the pandemic in mid-2019.
But then, tariffs for everybody! Now tenants are worried that a recession is coming, inflation is going to rise, and that so too will interest rates. Uncertainty is bad for business.
Here's where things broadly sit as of the beginning of this year:
The national office vacancy rate was 19.7% at the end of February 2025
San Francisco had the highest vacancy at 27.8%
$7 billion worth of office sales were recorded in the first two months of the year and the average price was $177 per square foot
The cheapest markets are/were in the midwest with Minneapolis-Saint Paul recording the lowest average sale price of $50 per square foot (versus $215 psf a year ago)
Chicago averaged $67 psf
The most expensive markets were places like San Diego ($662 psf), Manhattan ($450 psf), San Francisco ($282 psf), Miami ($239 psf), and Los Angeles ($207 psf) — we continue to see a flight to quality
Maybe things will get better later this year, or maybe they won't. It's impossible to know what comes next in this trade war.
Cover photo by Delia Little on Unsplash
In response to the tragic collapse of the 12-storey Champlain Towers South building in Surfside last year, the state of Florida is set to pass new stricter condominium rules around inspections and reserve funds. And according to the WSJ, the requirements would be some of the strictest in the US.
Under the House bill that has already passed, condominium buildings that are three or more stories would need to be fully inspected and recertified once they are 30 years old. For buildings within 3 miles of a coast (salt water is impactful), the requirement would be 25 years old. Following this recertification, the buildings would then need to be inspected every 10 years. Under the proposed Senate bill, the inspection process would start after 20 years and be required every 7 years. In both cases, the reports that come out of these inspections would need to be submitted to all unit owners and to local building officials.
If approved, these rules would have an immediate impact on the market given that about 900,000 of the approximately 1.5 million condominium units in Florida are older than 30 years old.
But is all of this enough? I think the devil is in the details.
Under the House bill, unit owners would no longer be able to waive the collection of certain building reserves. But under the Senate bill, the requirements for waiver would simply be tightened. How tight? In all honesty, I don't know the specifics. I haven't read the bills. But the collection of reserve funds is paramount. And after reading the above WSJ article, I can't help but feel like these new policies might still be less stringent than what we already have here in Ontario.
Here are two excerpts from Ontario's Condominium Act:
Put more simply, all buildings and structures need to have regular inspections. Materials and systems naturally depreciate over time and so the point of a reserve fund study is to determine (1) what will need to be repaired/replaced, (2) when it will need to be repaired/replaced, and (3) how much it might cost. You then need to ensure that the money is in place to carry out the execution of said study. In all cases, there should be zero compromises around life safety.
According to the WSJ, the US office market saw a significant increase in leasing activity in the first quarter of this year. Approximately 115 million square feet of space was leased, which represents a 13% increase from the previous quarter and the highest level since before the pandemic in mid-2019.
But then, tariffs for everybody! Now tenants are worried that a recession is coming, inflation is going to rise, and that so too will interest rates. Uncertainty is bad for business.
Here's where things broadly sit as of the beginning of this year:
The national office vacancy rate was 19.7% at the end of February 2025
San Francisco had the highest vacancy at 27.8%
$7 billion worth of office sales were recorded in the first two months of the year and the average price was $177 per square foot
The cheapest markets are/were in the midwest with Minneapolis-Saint Paul recording the lowest average sale price of $50 per square foot (versus $215 psf a year ago)
Chicago averaged $67 psf
The most expensive markets were places like San Diego ($662 psf), Manhattan ($450 psf), San Francisco ($282 psf), Miami ($239 psf), and Los Angeles ($207 psf) — we continue to see a flight to quality
Maybe things will get better later this year, or maybe they won't. It's impossible to know what comes next in this trade war.
Cover photo by Delia Little on Unsplash
In response to the tragic collapse of the 12-storey Champlain Towers South building in Surfside last year, the state of Florida is set to pass new stricter condominium rules around inspections and reserve funds. And according to the WSJ, the requirements would be some of the strictest in the US.
Under the House bill that has already passed, condominium buildings that are three or more stories would need to be fully inspected and recertified once they are 30 years old. For buildings within 3 miles of a coast (salt water is impactful), the requirement would be 25 years old. Following this recertification, the buildings would then need to be inspected every 10 years. Under the proposed Senate bill, the inspection process would start after 20 years and be required every 7 years. In both cases, the reports that come out of these inspections would need to be submitted to all unit owners and to local building officials.
If approved, these rules would have an immediate impact on the market given that about 900,000 of the approximately 1.5 million condominium units in Florida are older than 30 years old.
But is all of this enough? I think the devil is in the details.
Under the House bill, unit owners would no longer be able to waive the collection of certain building reserves. But under the Senate bill, the requirements for waiver would simply be tightened. How tight? In all honesty, I don't know the specifics. I haven't read the bills. But the collection of reserve funds is paramount. And after reading the above WSJ article, I can't help but feel like these new policies might still be less stringent than what we already have here in Ontario.
Here are two excerpts from Ontario's Condominium Act:
Put more simply, all buildings and structures need to have regular inspections. Materials and systems naturally depreciate over time and so the point of a reserve fund study is to determine (1) what will need to be repaired/replaced, (2) when it will need to be repaired/replaced, and (3) how much it might cost. You then need to ensure that the money is in place to carry out the execution of said study. In all cases, there should be zero compromises around life safety.
People like ski and snowboard towns. Here's an excerpt from a recent WSJ article talking about Park City:
Prices continued to rise in most luxury ski towns this past year, but none grew as much as Park City, a former silver mining town 32 miles east of Salt Lake City. The average home sale price there grew 35% in 2023 from 2022, compared with a 9.4% increase at Vail and Beaver Creek and 3.2% at Aspen, according to the resort report by Summit Sotheby’s International Realty.
The main point of the article is this: Park City has gotten really expensive, and so people are now looking and buying homes further out in places like Heber City, Midway, and Kamas. Here's how expensive expensive is:
Over the last four years, Covid has stoked demand for western resort real estate. In Park City, single-family homes have sold for a median price of $4 million year-to-date, up from $1.996 million in 2019, according to Redfin, which averaged the monthly median sales prices weighted for the number of homes sold. One home was listed in September for $65 million, which could set a record for the state. It’s now under contract, according to listing agent Paul Benson of Engel & Völkers, who declined to disclose the sale price.
This, of course, isn't a novel phenomenon. It's the whole "drive until you qualify" thing. But what's interesting about this particular mountain example is that it's not centered around access to a CBD or downtown; it's centered around "how fast can I get to a ski and snowboard resort?"
For example, Deer Valley has a new East Village that is expected to open up in 2025. This brings the cities mentioned above closer in. And buyers seem to be doing that math: "It's a 25-minute drive today, but next year I'll be able to get on a lift in 15 minutes. Score."
Given that Deer Valley also doesn't allow snowboarders, it's interesting to think about how these trends could be bifurcating the region between skiers and snowboarders. I don't have any data on this, but I bet if you mapped it out, there would be some sort of clustering happen.
The article also goes on to talk about transportation. Because you can't talk about new development and real estate without talking about traffic. But I think Bill Ciraco (Park City Council) gets it exactly right in the article: This is a car problem, and less of a people problem.
In my mind, the Wasatch Range is destined for something like this ONE Wasatch concept, which is/was a proposal to link seven resorts through a handful of new skiable connections. This is similar to what you'll find in Europe, and it means less driving and more time on the mountain.
That's what everyone wants to be doing anyway.
Photo by Lauren Pandolfi on Unsplash
People like ski and snowboard towns. Here's an excerpt from a recent WSJ article talking about Park City:
Prices continued to rise in most luxury ski towns this past year, but none grew as much as Park City, a former silver mining town 32 miles east of Salt Lake City. The average home sale price there grew 35% in 2023 from 2022, compared with a 9.4% increase at Vail and Beaver Creek and 3.2% at Aspen, according to the resort report by Summit Sotheby’s International Realty.
The main point of the article is this: Park City has gotten really expensive, and so people are now looking and buying homes further out in places like Heber City, Midway, and Kamas. Here's how expensive expensive is:
Over the last four years, Covid has stoked demand for western resort real estate. In Park City, single-family homes have sold for a median price of $4 million year-to-date, up from $1.996 million in 2019, according to Redfin, which averaged the monthly median sales prices weighted for the number of homes sold. One home was listed in September for $65 million, which could set a record for the state. It’s now under contract, according to listing agent Paul Benson of Engel & Völkers, who declined to disclose the sale price.
This, of course, isn't a novel phenomenon. It's the whole "drive until you qualify" thing. But what's interesting about this particular mountain example is that it's not centered around access to a CBD or downtown; it's centered around "how fast can I get to a ski and snowboard resort?"
For example, Deer Valley has a new East Village that is expected to open up in 2025. This brings the cities mentioned above closer in. And buyers seem to be doing that math: "It's a 25-minute drive today, but next year I'll be able to get on a lift in 15 minutes. Score."
Given that Deer Valley also doesn't allow snowboarders, it's interesting to think about how these trends could be bifurcating the region between skiers and snowboarders. I don't have any data on this, but I bet if you mapped it out, there would be some sort of clustering happen.
The article also goes on to talk about transportation. Because you can't talk about new development and real estate without talking about traffic. But I think Bill Ciraco (Park City Council) gets it exactly right in the article: This is a car problem, and less of a people problem.
In my mind, the Wasatch Range is destined for something like this ONE Wasatch concept, which is/was a proposal to link seven resorts through a handful of new skiable connections. This is similar to what you'll find in Europe, and it means less driving and more time on the mountain.
That's what everyone wants to be doing anyway.
Photo by Lauren Pandolfi on Unsplash
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