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 | Sep 17, 2018
TaylorMade Canada HQ includes golf laboratory and product showroom
ZZen Design Build was the general contractor for the project.
Office Buildings | Sep 5, 2018
Facebook’s new Frank Gehry-designed Menlo Park HQ extension includes a massive green roof
Level 10 Construction was the general contractor for the project.
Office Buildings | Aug 27, 2018
The open office isn't dead
The degree of open or enclosed doesn't matter in high-performing work environments. If the space is designed to function well, all individual space types are rated as equally effective.
Office Buildings | Aug 17, 2018
An elliptical office building goes with the flow in Boston
Exterior design cuts waste, saves energy, says Building Team members.
Office Buildings | Aug 14, 2018
Flexibility tops office workers' wish lists, followed by healthcare
A survey of 1,000 office workers in the US and UK found that men value health insurance above any other work perk, whereas women would prefer more flexibility in their office job.
Office Buildings | Aug 13, 2018
There's more to the open office than headlines suggest
A study found that contrary to popular belief, the open office did not encourage—but rather, inhibited—face-to-face communication.
Office Buildings | Jul 31, 2018
Office trends 2018: Campus consolidations bring people together
Companies create community-rich work environments where employees can thrive.
Office Buildings | Jul 25, 2018
New study on occupant comfort advances Saint Gobain’s design approach for renovation and new construction
The building products giant gauges its employees’ perceptions of old and new headquarters environments.
Office Buildings | Jul 18, 2018
A day in the life of an ‘agile worker’
When our Gensler La Crosse office relocated last year, we leveraged the opportunity to support an agile workplace strategy (aka, no assigned seating). Here’s what I’ve experienced firsthand.
Office Buildings | Jul 17, 2018
Transwestern report: Office buildings near transit earn 65% higher lease rates
Analysis of 15 major metros shows the average rent in central business districts was $43.48/sf for transit-accessible buildings versus $26.01/sf for car-dependent buildings.
