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
Office Buildings | Feb 23, 2022
The Beam on Farmer, Arizona’s first mass timber, multi-story office building tops out
The Beam on Farmer, Arizona’s first mass timber, multi-story office building, topped out on Feb. 10, 2022.
Resiliency | Feb 15, 2022
Design strategies for resilient buildings
LEO A DALY's National Director of Engineering Kim Cowman takes a building-level look at resilient design.
Office Buildings | Feb 1, 2022
Mennica Legacy Tower: GP's latest office complex in Warsaw is uniquely designed
Mennica Legacy Tower marks GP’s first completed project in Poland. The Mennica Legacy Tower was developed by an affiliate of Golub & Company LLC and Mennica Towers GGH MT Sp z o o S.K.A, and delivered in collaboration with Epstein, a design firm with offices in Chicago and Warsaw.
Laboratories | Jan 28, 2022
3 must-know strategies for developers in today’s life sciences industry
While the life sciences industry had been steadily growing, this growth exploded when the pandemic arrived—and there is no indication that this lightning-fast pace will slow down any time soon.
Office Buildings | Jan 26, 2022
BlackRock’s Innovation Hub in Atlanta showcases its global design guidelines
The two-story space harkens to the city’s culture and past.
Coronavirus | Jan 20, 2022
Advances and challenges in improving indoor air quality in commercial buildings
Michael Dreidger, CEO of IAQ tech startup Airsset speaks with BD+C's John Caulfield about how building owners and property managers can improve their buildings' air quality.
3D Printing | Jan 12, 2022
Using 3D-printed molds to create unitized window forms
COOKFOX designer Pam Campbell and Gate Precast's Mo Wright discuss the use of 3D-printed molds from Oak Ridge National Lab to create unitized window panels for One South First, a residential-commercial high-rise in Brooklyn, N.Y.
Headquarters | Oct 28, 2021
Florida’s Seagate Development Group tackles design-build projects from a developer’s vantage
A “single point of contact” for clients, says its CEO.
Office Buildings | Oct 26, 2021
A massive office reno project in Detroit sought to create destination spaces for returning workers
The interior design firm Pophouse relied heavily on employee input for a pilot remodel.
Cladding and Facade Systems | Oct 26, 2021
14 projects recognized by DOE for high-performance building envelope design
The inaugural class of DOE’s Better Buildings Building Envelope Campaign includes a medical office building that uses hybrid vacuum-insulated glass and a net-zero concrete-and-timber community center.
