Originally published on July 22, 2022, by Lynn Pollack for Globest.com.
The average US office listing rate hit $37.58 in June, falling 2.6% year-over-year, while the national vacancy rate ticked up 20 basis points over the same period to 15.2, according to CommercialEdge.
Originally published on June 7, 2022, by Jack Rogers for GlobeSt.com.
A joint research team from NYU and Columbia University studying the impact of remote work on office properties says office buildings will lose 28% of their value by 2029 if remote/hybrid work patterns become the norm.
Originally published on May 10, 2022, by Michael Tucker for Mortgage Bankers Association.
CBRE, Dallas, said most office-using companies are developing long-term plans to expand or contract their office space now that employees are returning at least part-time after two years of mostly remote work.
Originally published on March 9, 2022 by Randall Zisler, Ph.D. for Zisler Capital Associates.
A new economic analysis of the state of U.S. office buildings reveals that as much as 70% of the total inventory faces an alarming period of repricing due to fast-paced obsolescence, accelerated by COVID but exacerbated by evolving environmental and health standards. The underlying factors, that will get stronger over the long term, are strict new government standards for energy efficiency and growing tenant demands for healthy, safe, and energy-efficient office environments with ample modern amenities.
Commercial real estate tenants say they are more likely to increase their space next year than decrease it, with around 70% reportedly looking to expand, the Visual Lease Data Institute reported Nov. 10 in its new commercial real estate outlook. Most tenants and landlords expect rent prices to be the same or slightly higher next year.
Originally published by Michael Tucker on October 26, 2021, for Mortgage Bankers Association.
CBRE, Dallas, said the flex-office sector is poised to benefit as companies adapt their office portfolios to accommodate more flexible work practices.
Originally published on August 17, 2021, by Michael Tucker for Mortgage Bankers Association.
Fitch Ratings, New York, said long-term office leasing plans will not likely be affected even if U.S. corporations continue to delay their return-to-office plans.
Originally published midyear 2021 by Marcus & Millichap.
Broader recovery fortifies a positive outlook. Resilient during the health crisis, the medical office segment is in a position of strength. Demographic trends and an anticipated boost in health services are positioned to foster long-term tenant demand that will bolster investor confidence in the sector. Shorter-term, the full-scale reopening of most states’ economies and widespread vaccination efforts have laid the foundation for a broad economic recovery that will fuel continued employment growth in the second half of this year. The expiration of enhanced unemployment benefits in September and many states’ plans to terminate the allowance prior to the deadline have the potential to motivate more individuals to obtain work. Furthermore, the reopening of schools this fall should further aid employers when filling open positions during the final third of the year. The resulting employment growth will raise the number of commercially insured households, lifting health spending and the number of medical visits. Together these factors will fuel health-related hiring and supplement demand for medical office space.
Originally published on June 16, 2021, by Michael Tucker for the Mortgage Bankers Association.
U.S. companies have scaled back their plans to make big cuts to their office portfolios and many now expect their offices to support “collaborative” work in person rather than remotely, said CBRE, Dallas.
Originally published by Michael Tucker on February 23, 2021, for Newslink.com
The office market has seen less deterioration during the pandemic recession than it did during the Great Recession, but it’s not out of the woods yet, reported Moody’s Analytics REIS, New York.
By Michael Tucker
Cushman & Wakefield, Chicago, reported the recession that began in March is still being felt in the U.S. office market.
By David Kitai
A study of the COVID-19 pandemic’s impact on commercial real estate, commissioned by the Building Owners and Managers Association International (BOMA), has found that office users face widespread economic challenges but many remain convinced that in-person workspaces are crucial to their operations. They noted, as well, that landlords and property managers have successfully adapted to new needs during the pandemic.
In NAIOP’s sixth monthly survey tracking the effects of the pandemic on the commercial real estate industry, respondents reported continued gradual improvement in deal activity, but also reported more tenants seeking rent relief, particularly in the office sector.
The survey was completed by 203 NAIOP members between September 15 - 18, 2020. Respondents represent a range of professions, including developers, building owners, building managers, brokers, lenders and investors.
By Jon Banister
Tenant demand in the office market has been increasingly favoring shorter-term lease deals, a trend that complicates how much buildings are worth.
Demand for office space is intrinsically linked to the economy; generally in a downturn, office demand drops off as employment levels fall and corporates move into cash preservation mode. The global pandemic has undoubtedly pushed us into a global recession and in the short term this will have a direct impact on office demand. However, in light of the success of wholescale working from home, the question is now being asked – over the longer term, will this be the catalyst for the end of the office?
This is not the straightforward equation it is often portrayed as; increased working from home does not directly equal less demand for office space. There are a myriad of other factors which need to be looked at, including density, financial returns, productivity and technology. Before examining these factors, it is worth taking a step back to look at the function and purpose of the office from both the employer and employee perspective.
By Scott Baltic
National economic upheaval and surging unemployment will push U.S. office market absorption into negative territory through the second quarter of next year. That’s according to the NAIOP Research Foundation’s Office Space Demand Forecast for the second quarter.
By Ann Saphir
The rise in co-working spaces, like those offered by WeWork, may be a source of financial instability that could make the next U.S. recession worse by sparking a run on commercial real estate, Boston Federal Reserve Bank President Eric Rosengren said.
By Michael Tucker
Despite steadily growing new office supply, robust absorption held the sector's vacancy rate steady at 13.7 percent in April, said Yardi Matrix, Santa Barbara, Calif.
By Patricia Kirk
U.S. office market performance in the first quarter of 2019 showed resilience, with roughly 14 million sq. ft. of absorption and dropping vacancy, despite increasingly cautious economic sentiment, reports real estate services firm JLL.
By Barbra Murray
The future still bodes well for the office and industrial sectors, according to the Royal Institution of Chartered Surveyors 2019 Q1 U.S. Commercial Property Monitor report. However, survey participants indicate that more downward movement is on tap for the retail sector.
