The Office Market

creative office space - q1 2023

Market Trends

For over three years, I’ve been telling my clients, “we still don’t know” regarding movements and trends in local, regional, and national office markets. They were tired of hearing it, and so was I. However, in Q1 2023, significant changes began. Rate hikes, non-repayment of debt, uncertainty, weak markets, rapid vacancies, and highly discounted asset trades have surged in the last 60 days. The anticipated shifts in the office market are now happening quickly.

Tenant Preferences

Tenants are now opting for less space but are moving into Class B+ and Class A buildings with better locations and amenities.

Market Variability

The market varies significantly even within short distances. This means rates, deal structures, concessions, competition, suite sizes, and landlord appetites differ widely.

Work-from-Home Dynamics

Work-from-home is now in its fourth year, and new company and community cultures are emerging. How tenants and companies operate in this new world is highly situational, influenced by factors like culture, leadership, worker demographics, and office design.

Knowledge is Key

In tenant representation, knowledge is crucial:

  1. Building-to-building
  2. Broker-to-broker
  3. Landlord-to-landlord
  4. Local area-to-local area

Looking Ahead

We know these emails are brief, and we hope they are appreciated. In our next piece, we’ll highlight how some companies are redefining office use, design, function, and vibe.