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 | Oct 17, 2019
New social campus for innovators, tech leaders covers a full city block
Hollwich Kushner, with Gensler as design development architects, designed the building.
Office Buildings | Oct 15, 2019
New 80,000-sf coworking space completes in Chicago
It is the third ‘Spaces’ location in Chicago.
Office Buildings | Oct 8, 2019
David Chipperfield Architects to design new Rolex USA headquarters
The project will replace the existing building that has been occupied by Rolex since the 1970s.
Healthcare Facilities | Oct 1, 2019
Medical offices are filling space vacated by retail
Healthcare developers and providers like the locations, traffic, and parking these spaces offer.
Office Buildings | Sep 25, 2019
'Catalyst' will be Washington’s first CLT office building
Katerra is the design builder for the project with Michael Green Architecture as the design architect.
Office Buildings | Sep 6, 2019
New office complex in Southern California strives to create a Silicon Valley-like campus vibe
FLIGHT at Tustin Legacy includes 100,000 sf of amenities, and is laid out to tie into the surrounding city.
Office Buildings | Sep 3, 2019
A new HOK report focuses on designing offices for a neurodiverse workforce
Emphasizing inclusion and choice is a key component.
Giants 400 | Aug 8, 2019
Top 110 Office Sector Construction Firms for 2019
Turner, STO Building Group, AECOM, Clayco, and Clark lead the rankings of the nation's largest office sector contractors and construction managers, as reported in Building Design+Construction's 2019 Giants 300 Report.
Giants 400 | Aug 8, 2019
Top 100 Office Sector Engineering Firms for 2019
Jacobs, Burns & McDonnell, WSP, Thornton Tomasetti, and Arup head the rankings of the nation's largest office sector engineering and engineering architecture (EA) firms, as reported in Building Design+Construction's 2019 Giants 300 Report.
Giants 400 | Aug 8, 2019
Top 200 Office Sector Architecture Firms for 2019
Gensler, AECOM, Perkins+Will, Stantec, and HOK top the rankings of the nation's largest office sector architecture and architecture engineering (AE) firms, as reported in Building Design+Construction's 2019 Giants 300 Report.
