Despite office demand still recovering more than five years since the pandemic, developers are considering the unthinkable in the not-too-distant future: building a new office building without a commitment from a tenant.
Office vacancy across the U.S. hit a record-high 20.4% in the first quarter, according to Moody`s. But vacancy in prime buildings is less than 15%, according to CBRE.
In two years, CBRE projects that rate will be cut nearly in half to 8.2% because of how little office construction has taken place since the pandemic and how coveted the top-quality buildings are.
“Along with this insatiable demand that`s going into this very small cohort segment of the trophy product, it begins to make you realize that we`re going to run into a challenge,” CBRE Global Head of Occupier Research Julie Whelan said during a panel discussion at the National Association of Real Estate Editors convention in New Orleans last week.
“Our best estimate is that by 2027, we`re effectively going to be out of prime trophy space,” she said. ...more
RSK: I have a hunch they are right on...at least I am hoping so.
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- - Volume: 25 - WEEK: 27 Date: 7/1/2025 12:17:36 PM -