The flight to debt-free landlords

The flight to debt-free landlords

While the rock climbing wall, zen garden or virtual reality fitness studio of a class A building may be most enticing for some, an increasing amount of companies are simply looking for which landlords have the least amount of debt right now.

As the U.S. office market grapples with the structural shift to hybrid work, there’s a lot of chatter about the ‘flight to quality,’ or movement toward state-of-the-art spaces with competitive amenities. But the notion that companies, eager to encourage workers back to the office, are simply choosing the most wildly equipped and tech-enhanced class A buildings doesn’t tell the whole story.

In Los Angeles, San Francisco, Washington, DC, and other major cities, tenants are also ‘fleeing’ to institutional landlords with either no debt or manageable debt levels–whether or not their building is brand new or has a rock climbing wall, zen garden, or virtual reality fitness studio.

Financial losses and opportunities facing today’s office market


RSK: If building owners have little debt, they are able to do improvements on the building and for the tenants. Keep your tenants happy, you will keep them in a building they are happy to come to work to and have their clients come as well.

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- - Volume: 24 - WEEK: 23 Date: 6/4/2024 1:33:13 PM -