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I'd be curious to know how much of the office space being built is pre-leased.
New office buildings will of course have a competitive advantage by marketing their latest and greatest features, but if all this new space just ends up cannibalizing existing office tenants (which seems to be likely the case), there's just going to be a lot of musical chairs out there.
Something just has to give with these kinds of trends still going on. A lot of landlords are still going to be left holding the bag:
I think the trend of office to residential conversions is the best thing to come out of all this extra stock. For half a century CBDs have been focusing on New.
New office, new Residential.
To me it has resulted in lack of character, especially since it was usually a matter of older buildings making way for new ones.
With the recent increase in repurposing older offices into residential it not only reduces commercial vacancy rates but it diversifies residential stock.
Atlanta is converting the 125 year old Grant building into residential.
Dallas is converting the 50 floor, 1.4M sq foot Santander building into residential.
Houston is converting the Historic Esperson Buildings and the 45 floor- 1.2M sq foot ( Humble Oil/Exxon) building into residential. A few blocks away another office to Residential conversion is well on its way and there is talk of converting the old Continental/ Chevron building to residential.
Just 10 years ago all these buildings would have been blown up by in happy that they are getting a new breath of life and these cities vacancy rates will decrease which will open up new demand for office
Indeed, I was looking at the "as percent of stock" chart. But notably Chicago does actually lag Nashville in terms of overall office space construction--but not quite so exponentially.
Location: That star on your map in the middle of the East Coast, DMV
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Originally Posted by mhays25
No, it's going full bore. The buildout might be paused but the building will be completed.
Same with Amazon's other Downtown Bellevue buildings. They're still going up, but the buildouts are being rethought.
They also severely underreport office construction in the Seattle area vs. CoStar and probably others.
It's amazing how badly some sources screw these things up!
Ok that's good news. I know there was a lot of Amazon sq footage in the pipeline for Bellevue, so good to hear the overall buildout is happening. With the first phase of HQ2 in Arlington wrapping up now at around 2.1 million sq ft, it's encouraging to know that all plans haven't halted in the other major markets. The 2nd phase of HQ2 was supposed to break ground later this year and is planned at 2.5 million sq ft. Amazon as of now, says even after their job cuts, that they are still committed to their HQ2 presence, but I could also see a reworking of the buildout potentially happening and being rethought there too.
Wow, the Media has been saying that NYC is dying and Miami is the utopia for workers and offices!
Awesome report, thanks for sharing. Happy to see NYC doing well despite all the hate as of late.
Even though I am a Miami resident, I have never bought the hype about Miami being the next _______ when it came to substantial STEM industry employment and office demand. It is however a growing location for executive teams and remote workers. Most of Miami's tower construction is hyper luxury housing.
As we move more and more away from the COVID shutdown days, I don't see the world of office space/construction getting better or stable anytime soon. Even with some companies sending folks back, I just don't see us ever going back to how things were pre-COVID especially with so many companies realizing how much money they save by not leasing so much space but we'll see.
Amazing that Austin is so high. But don't get why there's one line for the Bay Area, and then another for San Francisco.
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