In what is likely a historic first, the amount of office space in the U.S. is forecast to decline in 2023, according to Jones Lang LaSalle.
This would be the first net decline according to data going back to 2000, JLL says, and it’s likely the first decline ever.
National office inventory is believed to have never declined in the past, though it may have come close to doing so during the Great Depression.
A dearth of new construction and a large amount of office space being repurposed or destroyed accounts for the project decline this year. Less than five million sf of new office space has broken ground in the U.S. this year, while 14.7 million sf has been removed.
The post-pandemic work-from-home trend and the increased costs of borrowing have dampened the office market. Office delinquencies are on the rise, and property values in the office sector are falling.
Recent analysis from market research firm Trepp estimated average office building valuation declines from 52% for those constructed after 2000 to 60% for pre-1950 buildings. This sets “a gloomy tone” for the future office market, Trepp says.
Related Stories
Office Buildings | Dec 5, 2022
How to foster collaboration and inspiration for a workplace culture that does not exist (yet)
A building might not be able to “hack” innovation, but it can create the right conditions to foster connection and innovation, write GBBN's Chad Burke and Zachary Zettler.
Giants 400 | Dec 1, 2022
Top 100 Office Building Core+Shell Contractors and CM Firms for 2022
Turner Construction, AECOM, Clayco, and Gilbane top the ranking of the nation's largest office building core+shell contractors and construction management (CM) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Giants 400 | Dec 1, 2022
Top 75 Office Building Core+Shell Engineering + EA Firms for 2022
Jacobs, Alfa Tech, Burns & McDonnell, and Arup head the ranking of the nation's largest office building core+shell engineering and engineering/architecture (EA) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Giants 400 | Dec 1, 2022
Top 150 Office Building Core+Shell Architecture + AE Firms for 2022
Gensler, NBBJ, Perkins and Will, and Stantec top the ranking of the nation's largest office building core+shell architecture and architecture/engineering (AE) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Multifamily Housing | Nov 29, 2022
Number of office-to-apartment conversion projects has jumped since start of pandemic
As remote work rose and demand for office space declined since the start of the Covid-19 pandemic, developers have found converting some offices to residential use to be an attractive option. Apartment conversions rose 25% in the two years since the start of the pandemic, with 28,000 new units converted from other property types, according to a report from RentCafe.
Giants 400 | Nov 28, 2022
Top 130 Office Sector Contractors and CM Firms for 2022
Turner Construction, STO Building Group, Gilbane, and CBRE top the ranking of the nation's largest office sector contractors and construction management (CM) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Giants 400 | Nov 28, 2022
Top 85 Office Sector Engineering and EA Firms for 2022
Jacobs, Alfa Tech, AECOM, and Burns & McDonnell head the ranking of the nation's largest office sector engineering and engineering/architecture (EA) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Giants 400 | Nov 28, 2022
Top 200 Office Sector Architecture and AE Firms for 2022
Gensler, Perkins and Will, Stantec, and HOK top the ranking of the nation's largest office sector architecture and architecture/engineering (AE) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Data Centers | Nov 28, 2022
Data centers are a hot market—don't waste the heat!
SmithGroup's Brian Rener shares a few ways to integrate data centers in mixed-use sites, utilizing waste heat to optimize the energy demands of the buildings.
BAS and Security | Oct 19, 2022
The biggest cybersecurity threats in commercial real estate, and how to mitigate them
Coleman Wolf, Senior Security Systems Consultant with global engineering firm ESD, outlines the top-three cybersecurity threats to commercial and institutional building owners and property managers, and offers advice on how to deter and defend against hackers.