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 | Dec 18, 2018
Google announces new $1B Hudson Square campus project
The 1.7 million-sf campus will expand the company’s New York City presence.
Office Buildings | Dec 13, 2018
Apple selects Austin for $1 billion campus
The company will also build smaller expansions in six other U.S. cities over the next three years.
Office Buildings | Dec 4, 2018
Brookfield launches contest for startups to receive two years of free office space
This is part of a larger campaign to burnish the image of L.A.’s Wells Fargo Center.
Office Buildings | Nov 28, 2018
Amazon HQ2 and the new geography of work
The big HQ2 takeaway is how geography and mobility are becoming major workplace drivers.
Mixed-Use | Oct 25, 2018
Philadelphia’s uCity Square kicks off major expansion drive
This innovation center has several office, lab, and residential buildings in the works.
Office Buildings | Oct 25, 2018
Stantec consolidates three Portland-area offices into one downtown location
Stantec worked with Ankrom-Moisan Architects on the design.
Office Buildings | Oct 8, 2018
Netflix leases Epic, an under construction office tower in Hollywood
Gensler designed the building.
Office Buildings | Oct 1, 2018
NASA’s Cleveland-based Glenn Research Center to receive a new centerpiece
TEN Arquitectos designed the building.
Office Buildings | Sep 19, 2018
Manhattan’s Meatpacking District has a new tallest tower
CetraRuddy designed the office building.
