Intelligent Investment
Office: Down but Not Out
May 9, 2024 5 Minute Watch
Summary
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Vice Chairman and Co-Head of U.S. Office Capital Markets, East Region
Executive Vice President and Co-Head of U.S. Office Capital Markets, West Region
Lic. 01459868
- Last Year vs. Today
The number of deals in the market is roughly at 2023 levels, but signed confidentiality agreements are up 25%, and the bid count has increased from an average of 7 to 11 per deal. Institutions are also cautiously looking at office. - Generational Opportunities
Thanks to favorable pricing in the tier below trophy assets, there is a generational opportunity to invest in office space. Limited new supply and low availability in trophy assets are setting up that tier for stronger fundamentals. - Future of Office: Matt
Over the next few years, we are going to see office shrink across the country through conversions and teardowns. What remains of office will be much more attractive to occupiers and key to fostering company culture. The office of the future is walkable, easy to get to and highly amenitized. - Future of Office: Patrick
Our data shows turnover rates are higher for fully remote companies compared to those in the office, and younger workers’ attitudes toward the office are evolving. As time goes on, the thesis for investing in office again will be clearer and battle tested.
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Prime, or Class A+, office space has been outperforming other classes of office space since the beginning of the COVID-19 pandemic.