There is more pain to come in the office real estate market across the U.S., with maturing debt needing to be refinanced and a wave of expiring leases, but there is also what may seem at first brush to be a counter-intuitive message being sent to top tier companies by real estate intelligence company CoStar Group: prepare for an office space shortage.
You read that right: amid a commercial real estate market across U.S. downtowns being described in apocalyptic terms, CoStar sees a shortage on the horizon, with one key caveat for top companies to bear in mind...
You read that right: amid a commercial real estate market across U.S. downtowns being described in apocalyptic terms, CoStar sees a shortage on the horizon, with one key caveat for top companies to bear in mind...
- Up to
one-third of office real estate could be wiped out, according to
apocalyptic predictions about the emptying of downtowns and the end of
much white-collar work in towers.
- But the top tier of commercial
buildings will face a shortage in the years ahead, with construction of
elite Class A properties headed for a new low.
- Older trophy buildings are being sold at discounts, and some landlords facing debt refinancing at higher interest rates will struggle, but lease action in the premier property market is already higher this year than the 2015-2019 pre-Covid period, according to CoStar Group.
RSK: I agree with this to a point. The key here is, even though companies will downsize somewhat, they are willing to pay a premium in rent for the best amenities....so will there actually be a drop in rent proceeds for Class A-AAA space? I doubt it.
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- - Volume: 11 - WEEK: 48 Date: 11/29/2023 9:28:26 AM -