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 | Apr 5, 2021
FXCollaborative selected to create new lobby, amenity space for 3 Times Square
FXCollaborative designed the original building in 2001.
Office Buildings | Apr 5, 2021
Innovation One completes at University Research Park in Madison, Wis.
Valerio Dewalt Train designed the project.
Office Buildings | Mar 30, 2021
WELL Institute certifies a gigantic office complex with its highest health and safety rating
Poland’s Olivia Business Center one of the first to install ion air purification devices.
Office Buildings | Mar 26, 2021
Finding success for downtown office space after COVID-19
Using the right planning tools can spur new uses for Class B and C commercial real estate.
Office Buildings | Mar 24, 2021
JEA Headquarters tops out in Jacksonville
The building has recently topped out.
Energy Efficiency | Mar 23, 2021
ASHRAE’s new headquarters walks the talk about net-zero energy
The conversion of a 1970s’-era building demonstrates how older structures can be made more efficient and sustainable.
Office Buildings | Mar 22, 2021
Make-A-Wish Foundation of Southern Florida unveils design for new chapter HQ
Arquitectonica is designing the project.
Office Buildings | Mar 16, 2021
Perkins&Will unveils design of its New York Studio
The studio supports hybrid work models with agile layouts and integrated broadcast technologies.
Laboratories | Mar 10, 2021
8 tips for converting office space to life sciences labs
Creating a successful life sciences facility within the shell of a former office building can be much like that old “square peg round hole” paradigm. Two experts offer important advice.
Office Buildings | Mar 4, 2021
1905 industrial building set to become Acciona’s new office in Madrid
Foster + Partners is designing the project.