A few things we know about corporate real estate: it’s a focus of cost-cutting for companies, but it’s also probably the last asset you want to sell now in a soft market.
How soft? According to Elizabeth Ptacek, senior director of market analytics at commercial real estate information and analytics company CoStar, there is currently 232 million square feet of surplus commercial real estate up for sub-leasing. To put those numbers into perspective, Amazon’s HQ2 is 8 million square feet. Even more telling, the 232 million square feet is twice the level of surplus from before the pandemic.
How soft? According to Elizabeth Ptacek, senior director of market analytics at commercial real estate information and analytics company CoStar, there is currently 232 million square feet of surplus commercial real estate up for sub-leasing. To put those numbers into perspective, Amazon’s HQ2 is 8 million square feet. Even more telling, the 232 million square feet is twice the level of surplus from before the pandemic.
Key Points
- The amount of commercial real estate available for sub-lease is roughly equal to eight Amazon HQ2 towers.
- Other
than high-use leases such as medical offices and laboratories, few
lease holders can find buyers or tenants for unused office space.
- Companies that own their own campuses will likely wait out the current market, even knowing prices may further deteriorate.
RSK: If you do not have a solid NOI in your office building, it may be hard to refinance if your term is coming up. Foreclosures are on the horizon.
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- - Volume: 10 - WEEK: 47 Date: 11/15/2022 9:45:10 AM -