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 20, 2018
Flex and co-working office spaces create value for users, tenants, and developers, according to a new survey
More landlords see these spaces as “long-term solutions.”
Office Buildings | Feb 19, 2018
Large photovoltaic “wings” help eliminate emissions from this Italian headquarters building
The wings have a surface area of over 1,100 sm.
Office Buildings | Feb 13, 2018
Office market vacancy rate at 10-year low
Cautious development and healthy absorption across major markets contributed to the decline in vacancy, according to a new Transwestern report.
Office Buildings | Feb 8, 2018
Custom home or corporate office? Investment firm wanted both
Designed by Vertical Arts Architecture, the building features design elements found in high-end custom homes in the region.
Office Buildings | Feb 8, 2018
The American Psychiatric Association moves into The Wharf
The new office occupies 3 floors at 800 Main Avenue SW.
Wood | Feb 5, 2018
The largest timber office building in the U.S. will anchor Newark, N.J. mixed-use development
Michael Green Architecture is designing the building.
Green | Jan 30, 2018
Welcome to the Jungle: Amazon’s Spheres have opened to employees and the public
The Spheres provide the most unique aspect of Amazon’s downtown Seattle headquarters.
Reconstruction & Renovation | Jan 23, 2018
New co-working space will focus on serving local, African-American youth in Miami
The new space has been dubbed ‘Tribe.’
Office Buildings | Jan 18, 2018
At the ready: spec suites make hard-to-rent office space more attractive
Filling a need for startups looking for quick move-ins.
Office Buildings | Jan 18, 2018
*UPDATED* Amazon narrows list of possible HQ2 locations down to 20 cities
The company expects to invest over $5 billion in construction and grow HQ2 to include as many as 50,000 jobs.
