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 | Jan 14, 2016
JLL: Slowdown not expected for office market
The booming sector had an occupancy growth rate 1.3 times that of new supply in the fourth quarter of 2015.
Office Buildings | Jan 11, 2016
Spec for tech: Designing for the creative class
The new work environment, settings which blur the line between work and life, is inspired by cities and the attributes that all great urban environments share, writes Ben Tranel of Gensler.
Office Buildings | Jan 6, 2016
4 tips for creating flow in a multi-level workspace
Successful workplaces enable a clear progression of ideas and people, which can be challenging for workplaces that occupy multiple levels. Perkins+Will's Sarah Stanford found some strategies that have proven successful.
Office Buildings | Dec 23, 2015
Good design alone won’t eradicate mindless meetings
Gensler's Johnathan Sandler discusses efficient alternatives to dull, wasteful workplace meetings.
Office Buildings | Dec 17, 2015
John Buck Company to develop CNA’s Chicago headquarters
The 35-story building will have plenty of column-free space.
Office Buildings | Dec 9, 2015
HOK collaborates with IFMA on new workplace strategy research report
Report cites work-life balance as the top reason for implementing “distributed work” strategies.
Greenbuild Report | Dec 8, 2015
Is ‘green’ still a selling point in the office sector?
Some developers are missing an opportunity by downplaying sustainability at a time when demand for such features is palpable among lessee firms who are trying to attract younger workers.
Energy Efficiency | Nov 16, 2015
Amazon will heat its new Seattle campus with waste heat from next-door data centers
Up to 4 million kilowatt-hours of energy will be saved each year.
Office Buildings | Nov 6, 2015
Real Madrid to get new headquarters designed by Rafael de La-Hoz
The design of the building is made of a set of two parallelepiped-shaped volumes.
Office Buildings | Nov 3, 2015
Emotional intelligence and design
In a world in which technology and its skills are constantly changing, good people skills are becoming more important, writes VOA's Angie Lee.