With work-from-home firmly established, many real estate analysts predict a dramatic reduction in office space leasing and plummeting property values.
But the high-end of the office segment might actually be headed for a shortage, according to real estate intelligence company CoStar Group. This counterintuitive trend is due to a drastic drop in construction of elite Class A properties.
Despite the overall drop in occupied office space, buildings aged 0-3 years are doing well. They have attracted an average of 12.7 million sf per quarter since the beginning of 2020. By comparison, the quarterly average from 2011-2019 for similar properties was 11.7 million sf.
Office construction has slowed dramatically this year. Less than 30 million sf has broken ground in 2023, making it the lowest year for construction starts since 2011. If this trend continues, the type of space most in demand—newly constructed units—will have the shortest supply.
Related Stories
| Aug 9, 2012
Slideshow: New renderings of 1 WTC
Upon its scheduled completion in early 2014, One World Trade Center will rise 1,776 feet to the top of its spire, making it the tallest building in the Western Hemisphere.
| Aug 9, 2012
Slideshow: New renderings of 1 WTC
Upon its scheduled completion in early 2014, One World Trade Center will rise 1,776 feet to the top of its spire, making it the tallest building in the Western Hemisphere.
| Jul 24, 2012
Dragon Valley Retail at epicenter of Yongsan International Business District
Masterplanned by architect Daniel Libeskind, the Yongsan IBD encompasses ten city blocks and includes a collection of high-rise residences and commercial buildings.
| Jul 20, 2012
2012 Giants 300 Special Report
Ranking the leading firms in Architecture, Engineering, and Construction.
| Jul 20, 2012
Office Report: Fitouts, renovations keep sector moving
BD+C's Giants 300 Top 25 AEC Firms in the Office sector.
| Jul 17, 2012
Dr. Phillips Charities Headquarters Building receives LEED Silver
The building incorporates sustainable design features, environmentally-friendly building products, energy efficient systems, and environmentally sensitive construction practices.
| Jul 11, 2012
Skanska relocates its Philadelphia metro office
Construction firm’s new 19,100-sf office targets LEED Gold certification.
| Jul 3, 2012
Summit Design+Build completes Emmi Solutions HQ
The new headquarters totals 20,455 sq. ft. and features a loft-style space with exposed masonry and mechanical systems, 17-ft clear ceilings, two large rooftop skylights, and private offices with full glass partition walls.
| Jul 2, 2012
San Francisco lays claim to the greenest building in North America
The 13-floor building can hold around 900 people, but consumes 60% less water and 32% less energy than most buildings of its kind.
| Jun 18, 2012
BOKA Powell Wins ‘Deal of the Year’ for One McKinney Plaza Transformation
$6 million renovation converted 1980s-style building into a modern destination in uptown Dallas