Collier’s Q2 report looks at the current economic and real estate trends in the U.S. office markets and deep dives into local trends, uncovering what is declining, stabilizing or showing signs of recovery.
Recent research from the McKinsey Global Institute has modeled future demand for office, residential, and retail space in several scenarios. Findings based on these scenarios indicate that:
- Hybrid work is here to stay. As a result, office attendance has stabilized at 30 percent below prepandemic norms.
- Demand for office and retail space in superstar cities will remain below prepandemic levels. In a moderate scenario that McKinsey modeled, demand for office space is 13 percent lower in 2030 than it was in 2019 for the median city in the study.
- Real estate is local, and demand will vary substantially by neighborhood and city. Demand may be lower in neighborhoods and cities characterized by dense office space, expensive housing, and large employers in the knowledge economy.
- Cities and buildings can adapt and thrive by taking hybrid approaches themselves. Priorities might include developing mixed-use neighborhoods, constructing more adaptable buildings, and designing multiuse office and retail space.
Read the full report here.
As many organizations are now adopting hybrid-working strategies to create a more flexible and inclusive environment, having the right technology is imperative to ensure maximum productivity.
Collier’s recent global report documents the differences in each region when considering the factors that impact office demand, supply, pricing and sentiment.
For example, in North America there are challenges in improving the return to office occupancy rates where vacancy is at a 16% average. Whereas, in Europe and APAC, vacancy rates are between 8-10% with occupancy rates almost matching pre-Covid figures.
To read a full breakdown of each market, download Collier’s report here.
Knight Frank | Cresa’s data analysis has been shaped from 640 worldwide companies set against ever-evolving real estate ambitions. (Y)OUR SPACE investigates how the future of the workplace is likely to unfold over the next three years.
Results show that corporate real estate professionals believe complexity in the market is going to increase when considering business strategy, decision making, the workplace, to pick a few.
In addition, the majority of respondents believe their organisation’s work style will be hybrid three years from now at 55.7% followed by office first at 23.2% and remote first last at only 3.4%.
Discover more about (Y)OUR SPACE and read the other findings here.
Key findings from Avison Young’s Q1 2023 U.S. market overview include:
- Leasing activity slowed to the second-weakest amount since 2001, -42.2% from 2001 to Q1 2020 and -27.5% from post-COVID averages.
- Flight to quality remains pronounced, especially in markets such as Manhattan (+28.4%) where new construction demand is strong.
- Sublease availabilities increased to a new record in Q1 2023, more than doubling from Q1 2020 levels as tenants continue cost containment efforts.
- Tenant leverage has accelerated in U.S. gateway markets, with landlords offering more generous free rent periods and tenant improvement allowances.
- Tenants have refocused on sustainability, especially in a supply-rich market. LEED Platinum offices have consistently outperformed peer properties.
Download your copy of Avison Young’s Q1 2023 U.S. market overview here.
Key takeaways from Cushman & Wakefield’s Q1 2023 U.S. Office MarketBeat include:
- Occupiers are looking for cost-cutting opportunities impacting leasing activity which has declined 23% quarter-over-quarter
- Increase in sublease availability which now accounts for 15% of overall vacancy
- Elevated vacancy likely to increase throughout 2023 but is expected to stabilize in 2024 as the economy recovers
Download your copy of the MarketBeat report here.
The Urban Land Institute and The Instant Group have surveyed office occupiers, landlords and third-party advisors globally to understand how changing occupier behaviours and broader macro trends impact the demand for workspace.
The findings show a disconnect between landlords and occupiers, therefore, aims to offer solutions to help landlords navigate the changing needs of their occupiers.
Get your copy of the research here.
In WiredScore’s most recent report, they spoke to 1,000 real estate decision makers across North America to determine what they, and their employees, are looking for in an office space in the next five years.
Since the pandemic, the implementation of smart technology has dramatically increased as expectations from the modern workforce have changed, and occupiers are therefore willing to spend more on leasing space.
Smart technology will continue to play a pivotal role in the office market and Landlords must adapt to attract and retain occupiers in this competitive landscape.
