Despite its widespread use, the concept of ‘flight to quality’ falls short in capturing the nuanced dynamics of the office occupancy market. While it appears valid on the surface, a deeper analysis of leasing trends reveals its limitations. Among all rating classifications, only five-star-rated buildings, representing about 7% of total U.S. office inventory, have demonstrated consistent demand since 2020, with positive net absorption. However, this apparent strength masks underlying weaknesses. Positive absorption in these buildings has declined from over 15% in the four years preceding 2020 to just 8.5% since then. Several other indicators also challenge the flight-to-quality narrative.
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