August 22, 2023 | Washington, D.C.
As companies and employees absorb the lasting changes in work patterns brought by the pandemic, office occupiers are seeking out well-located buildings with amenities that lower the burden of commuting to work, according to a new report, Hybrid Work and the Future of the Office, published by the NAIOP Research Foundation in conjunction with CBRE. Newer office buildings are generally outperforming commodity buildings as a result, but not all older buildings are struggling to the same degree, with the largest increases in vacancy concentrated in poorly located buildings with few amenities.
Occupier surveys suggest that hybrid work arrangements remain in flux, and many expect office attendance to increase, supporting demand for space in both newer and older buildings. Although high interest rates and construction costs are deterring building owners from making significant renovations in the near term, older buildings in convenient, safe locations with access to adjacent amenities should be attractive to more cost-conscious occupiers as office utilization rises.
Among the report’s additional key findings:
Contributing authors of the report are Emil Malizia, Ph.D., CRE, Research Professor of City and Regional Planning, University of North Carolina-Chapel Hill and President, Malizia & Associates, LLC; Shawn Moura, Ph.D., Research Director, NAIOP; Dustin C. Read, Ph.D./J.D., Director of the Master of Real Estate Development Program, Clemson University; Jessica Morin, Director of U.S. Office Research, CBRE; and Julie Whelan, Senior Vice President, Global Head of Occupier Thought Leadership and Research Consulting, CBRE.
“The report finds that occupiers expect office utilization to increase, which should help to stabilize demand for office space. Companies are refining their work from home vs. in-office policies; at the same time, office space must meet the needs of employees in terms of location, flexibility and amenities to remain viable,” said Marc Selvitelli, CAE, president CEO of NAIOP.
About NAIOP: NAIOP, the Commercial Real Estate Development Association is the leading organization for developers, owners, investors and related professionals in office, industrial, retail, and mixed-use real estate. NAIOP provides unparalleled industry networking and education and advocates for effective legislation on behalf of our members. NAIOP advances responsible, sustainable development that creates jobs and benefits the communities in which our members work and live. For more information, visit naiop.org.
Kathryn Hamilton, NAIOP vice president for marketing and communications
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