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 | Oct 23, 2019
London’s new ‘Can of Ham’ office building completes construction
Foggo Associates designed the building.
Office Buildings | Oct 21, 2019
IH Mississippi Valley Credit Union headquarters completes construction
LEO A Daly designed the building.
Office Buildings | Oct 17, 2019
New social campus for innovators, tech leaders covers a full city block
Hollwich Kushner, with Gensler as design development architects, designed the building.
Office Buildings | Oct 15, 2019
New 80,000-sf coworking space completes in Chicago
It is the third ‘Spaces’ location in Chicago.
Office Buildings | Oct 8, 2019
David Chipperfield Architects to design new Rolex USA headquarters
The project will replace the existing building that has been occupied by Rolex since the 1970s.
Healthcare Facilities | Oct 1, 2019
Medical offices are filling space vacated by retail
Healthcare developers and providers like the locations, traffic, and parking these spaces offer.
Office Buildings | Sep 25, 2019
'Catalyst' will be Washington’s first CLT office building
Katerra is the design builder for the project with Michael Green Architecture as the design architect.
Office Buildings | Sep 6, 2019
New office complex in Southern California strives to create a Silicon Valley-like campus vibe
FLIGHT at Tustin Legacy includes 100,000 sf of amenities, and is laid out to tie into the surrounding city.
Office Buildings | Sep 3, 2019
A new HOK report focuses on designing offices for a neurodiverse workforce
Emphasizing inclusion and choice is a key component.
Giants 400 | Aug 8, 2019
Top 110 Office Sector Construction Firms for 2019
Turner, STO Building Group, AECOM, Clayco, and Clark lead the rankings of the nation's largest office sector contractors and construction managers, as reported in Building Design+Construction's 2019 Giants 300 Report.
