![]() Case in point: a recent deal for the City of Los Angeles to occupy multiple floors in the iconic Gas Co. But for building owners who will need to refinance in the near-term, that game is ending. As more top buildings are sold at depressed values, investors mark down the value of property holdings, and bonds go bad, new owners can make their finances work with attractive terms to tenants. It's not clear how long that will last, though. Meanwhile, landlords of iconic, trophy buildings are offering sweeteners, from bigger contributions to custom buildouts to the number of months offered rent-free. Still, the deals are "highly concentrated" in the premium space, Mobley said. Deals are smaller in square footage – which explains why overall market vacancy is up – and expiring leases are part of the reason for the uptick, too. The number of new lease transactions is higher this year on a quarterly basis than the 2015-2019 period. But those transactions also mean that now is a time when tenants are getting good deals. This isn't to say there won't be more headlines about trophy buildings being sold at discounted values. "Modern, premium office space remains in demand, just as it has historically, even during difficult economic times," said Phil Mobley, national director of office analytics at CoStar Group. ![]() From 2008-2010, during the Great Recession, the quarterly average was 13.6 million square feet. By comparison, the quarterly average from 2011-2019 for similar properties was 11.7 million square feet. They have attracted over 175 million square feet of net new occupancy since the beginning of 2020, an average of 12.7 million square feet per quarter. As office occupiers scrutinize their footprints more carefully, and in the months ahead leases that were executed before the pandemic continue to approach expiration, newly constructed buildings aged 0-3 years are proving to be the winners. Add to that the fact that more companies are headed back to an in-office reality closer to pre-pandemic expectations, and competition may be hotter than the weaker end of the market suggests.ĬoStar's call of an upcoming office space shortage is predicated on a look at the current data on leasing and construction activity compared to recent market history. The more office real estate that disappears – an estimate recently given to CNBC by the CEO of major bondholder TCW Group forecasts up to one-third of office real estate still to be wiped out – the more the major players in the market will be vying for the top tier of Class A commercial space. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower ![]() Best Debt Consolidation Loans for Bad Credit
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