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
Adaptive Reuse | Jul 10, 2023
California updates building code for adaptive reuse of office, retail structures for housing
The California Building Standards Commission recently voted to make it easier to convert commercial properties to residential use. The commission adopted provisions of the International Existing Building Code (IEBC) that allow developers more flexibility for adaptive reuse of retail and office structures.
Headquarters | Jul 5, 2023
The game room: Transforming game design office spaces
IA Interior Architects' designers discuss the aesthetic considerations for gaming industry work environments.
Office Buildings | Jun 28, 2023
When office-to-residential conversion works
The cost and design challenges involved with office-to-residential conversions can be daunting; designers need to devise creative uses to fully utilize the space.
Standards | Jun 26, 2023
New Wi-Fi standard boosts indoor navigation, tracking accuracy in buildings
The recently released Wi-Fi standard, IEEE 802.11az enables more refined and accurate indoor location capabilities. As technology manufacturers incorporate the new standard in various devices, it will enable buildings, including malls, arenas, and stadiums, to provide new wayfinding and tracking features.
Green | Jun 26, 2023
Federal government will spend $30 million on novel green building technologies
The U.S. General Services Administration (GSA), and the U.S. Department of Energy (DOE) will invest $30 million from the Inflation Reduction Act to increase the sustainability of federal buildings by testing novel technologies. The vehicle for that effort, the Green Proving Ground (GPG) program, will invest in American-made technologies to help increase federal electric vehicle supply equipment, protect air quality, reduce climate pollution, and enhance building performance.
Office Buildings | Jun 26, 2023
Electric vehicle chargers are top priority for corporate office renters
Businesses that rent office space view electric vehicle (EV) charging stations as a top priority. More than 40% of companies in the Americas and EMEA (Europe, the Middle East and Africa) are looking to include EV charging stations in future leases, according to JLL’s 2023 Responsible Real Estate study.
Laboratories | Jun 23, 2023
A New Jersey development represents the state’s largest-ever investment in life sciences and medical education
In New Brunswick, N.J., a life sciences development that’s now underway aims to bring together academics and researchers to work, learn, and experiment under one roof. HELIX Health + Life Science Exchange is an innovation district under development on a four-acre downtown site. At $731 million, HELIX, which will be built in three phases, represents New Jersey’s largest-ever investment in life sciences and medical education, according to a press statement.
Office Buildings | Jun 15, 2023
An office building near DFW Airport is now home to two Alphabet companies
A five-minute drive from the Dallas-Fort Worth International Airport, the recently built 2999 Olympus is now home to two Alphabet companies: Verily, a life sciences business, and Wing, a drone delivery company. Verily and Wing occupy the top floor (32,000 sf and 4,000 sf, respectively) of the 10-story building, located in the lakeside, work-life-play development of Cypress Waters.
Engineers | Jun 14, 2023
The high cost of low maintenance
Walter P Moore’s Javier Balma, PhD, PE, SE, and Webb Wright, PE, identify the primary causes of engineering failures, define proactive versus reactive maintenance, recognize the reasons for deferred maintenance, and identify the financial and safety risks related to deferred maintenance.
Mixed-Use | Jun 12, 2023
Goettsch Partners completes its largest China project to date: a mixed-used, five-tower complex
Chicago-based global architecture firm Goettsch Partners (GP) recently announced the completion of its largest project in China to date: the China Resources Qianhai Center, a mixed-use complex in the Qianhai district of Shenzhen. Developed by CR Land, the project includes five towers totaling almost 472,000 square meters (4.6 million sf).