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
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.
Office Buildings | Mar 3, 2021
Turano Baking Company’s new HQ and test kitchen completes in Oak Park, Ill.
Wright Heerema Architects designed the project.
Office Buildings | Feb 26, 2021
KWK Architects repurposes industrial site and warehouse into office space for Washington University School of Medicine
The project’s first two phases have been completed with the third and final phase under way.
Coronavirus | Feb 24, 2021
COVID-19 spurs need for specific building solutions
A medical supply house’s new call center and a vaccination module that can handle more patients faster are among the latest projects.
Market Data | Feb 24, 2021
2021 won’t be a growth year for construction spending, says latest JLL forecast
Predicts second-half improvement toward normalization next year.
Office Buildings | Feb 18, 2021
Bungie breaks ground on new, expanded HQ
NBBJ is designing the project.
