According to a recent analysis from Marcus & Millichap, office leases signed in the early stages of the epidemic, those typically with three-year durations, will be coming up this year, which could delay space attrition.
The research stated that the idea of turning those assets into other products “remains a niche possibility” considering that many office spaces might be vacant for several years. Certain older assets will be converted to other purposes, it was said.
Additionally, recent office leases have tended to feature smaller floorplans and shorter periods. And despite the rush to excellence, Class A properties continue to face difficulties. Class B and C office availability remained roughly unchanged at 12.8% last year despite the tier’s lower development pressure and potential for some of its more troubled stock to leave the market through the conversion process, according to the report.
Leasing activity for older buildings last year was at its lowest level since 2007, indicating that there is room for improvement.
