Commercial real estate investors worldwide are fairly optimistic about the continued demand for office space in a post-pandemic environment, though they believe demand will contract slightly, according to CBRE's recently released Global Investor Intentions Survey 2021.
:quality(75))
More than half of investors surveyed in the Americas (52%) expect office leasing volumes to decrease less than 10% over the next three years, which is roughly on par with how investors feel in the rest of the world. However, a sizable minority in the Americas (27%) said they believe that demand will contract 10% to 30% over the next three years, and only 10% believe it will stay the same.
Almost no investors (2%) in the Americas said they believe office demand will expand by up to 10%, no Americas-based investors said it would expand any more than that and 9% were unsure.
“Investors and lenders in particular are warming up to the idea of financing office buildings across the country, realizing that perhaps there was an overreaction to work-at-home and that, in fact, more companies are going to be returning to a work environment of some sort,” CBRE Debt & Structured Finance Global President Brian Stoffers told PlaceTech.
For investors in the Americas, office remains the third choice among property types, favored by fewer than 15% of respondents, CBRE reports. Industrial is still No. 1, with more than 35% picking it as their first choice, and multifamily is second, with nearly 30%.
Workers see flexible work environments as one of the ways to get workers back to the office, spurring some tenants to add coworking space into their overall leases, according to the panelists at Bisnow's Atlanta office event earlier this month.
"We have our first two [requests for proposals] that require coworking,” North American Properties Managing Partner Tim Perry said. "I think it's here to stay."
Tenants are still committing to traditional 10-year office leases, at least in some places, according to Avison Young, as reported by Commercial Observer. In Manhattan, average lease lengths were back up to 103 months in June, not far short of the 10-year benchmark.
“Psychologically, people are ready to return to work," Avison Young Executive Director of Innovation and Insight Advisory Craig Leibowitz told CO. "Schools reopening and things of that nature enables, or has enabled, tenants that have operated with more conviction to sign longer-term leases."
)
)
)
)
)
)
)
)
)
)
)
)