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
High-rise Construction | May 23, 2017
Goettsch Partners to design three-building Optics Valley Center complex
The Chicago-based firm won a design competition to design the complex located in Wuhan, China.
Office Buildings | Apr 18, 2017
Heineken USA Headquarters redesign emphasizes employee interaction
An open plan with social hubs maximizes co-working and engagement.
Office Buildings | Apr 17, 2017
Vertical integration triggers growth for an L.A.-based office furniture provider
Customization and technology drive sales for Tangram Interiors.
Market Data | Apr 13, 2017
2016’s top 10 states for commercial development
Three new states creep into the top 10 while first and second place remain unchanged.
Office Buildings | Apr 10, 2017
Innovation lab makes developing eye care solutions a collaborative affair
The Shop East innovation lab presents 13,500 sf of workspace across two floors with an emphasis on collaboration.
Mixed-Use | Apr 7, 2017
North Hollywood mixed-use development NoHo West begins construction
The development is expected to open in 2018.
High-rise Construction | Apr 4, 2017
Fifth tallest tower in the world opens in Seoul with the world’s highest glass-bottomed observation deck
Lotte World Tower’s glass-bottomed observation deck allows visitors to stand 1,640 feet above ground and look straight down.
Office Buildings | Apr 4, 2017
Amazon’s newest office building will be an ‘urban treehouse’
The building will provide 405,000 sf of office space in downtown Seattle.
Standards | Mar 29, 2017
Wellness movement is catching on with AEC firms
Hord Caplan Macht the latest to join the club by submitting its offices for certification under Fitwel’s program.
BIM and Information Technology | Mar 28, 2017
Digital tools accelerated the design and renovation of one contractor’s new office building
One shortcut: sending shop drawings created from laser scans directly to a wood panel fabricator.
