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 14, 2016
The importance of 'Place' in the workplace
More, and more, companies are emphasizing the importance of creating a meaningful sense of place in the office environment for all of their employees, writes Gensler's Kevin Rosenstein.
High-rise Construction | Dec 13, 2016
The tallest building in Manhattan’s Meatpacking district tops out
The office, designed by CetraRuddy, will be completed in 2017.
| Dec 6, 2016
Workplace pilots: Test. Learn. Build
Differentiated from mock-ups or beta sites, workplace pilots are small scale built work environments, where an organization’s employees permanently reside and work on a daily basis.
Office Buildings | Dec 6, 2016
eBay’s San Jose headquarters has a new interactive hub and welcome center named Main Street
The campus’s new ‘front door’ is designed to immerse visitors and employees into the company’s global commerce.
Office Buildings | Nov 16, 2016
Bjarke Ingels Group and Heatherwick Studios confirmed as architects for Google’s new London Headquarters
The headquarters will be located at Kings Cross, London.
Office Buildings | Nov 15, 2016
Under Armour unveils phase one of 50-acre Baltimore headquarters
The campus will be located in Baltimore’s $5.5 billion Port Covington redevelopment project.
Office Buildings | Nov 14, 2016
Media’s adaptive shift: Converged environments
The converged environment is a live-streaming workplace, a zone where news and content flow continuously and speed to market is everything.
High-rise Construction | Nov 3, 2016
Two identical Kohn Pederson Fox office towers may be headed to Wacker Drive
Murphy Development Group is looking for tenants for the $800 million project.
Office Buildings | Nov 2, 2016
The first completed office building from Bjarke Ingels Group features a double-curved façade and giant periscope
The building also marks the first BIG project in Philadelphia.
Office Buildings | Oct 26, 2016
The power of office amenities in the workplace
With a continued focus on providing more with less, companies across all industries are continually driving their workers to increase efficiency and productivity—to get product and services to market faster and cheaper, writes LPA's Karen Thomas.
