Owners with assets that may not be fit for purpose as offices are, in many cases, converting them to other uses where demand is higher. Assets in traditional office areas are being converted to multifamily, student housing, life sciences labs, ghost kitchens or even last-mile logistics hubs.
It is not a surefire bet. The inflationary environment makes development and redevelopment in any sector tricky right now.
“It is very difficult for any developer to stick to a cost budget today and it will get harder: The global inflationary environment will make it hard to predict where costs will go,” Blackstone Head of European Acquisitions Samir Amichi told Bisnow’s London State of the Market event late last year.
But given the demographic and demand headwinds behind a lot of other sectors right now, converting offices can make sense. Good luck with your new strategy!
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