WASHINGTON, DC–There is a CBD office building that is currently empty except for one retail tenant on the ground floor. This building recently underwent a renovation — unfortunately it wasn't the right renovation that apparently is necessary for commodity Class A buildings these days.
Class A commodity has been in trouble for some time as tenants continue their march to quality. Almost every category it seems — trophy, class B, even suburban office — has a constituency except for commodity Class A.
Now as the number crunching for Q3 is done it is clear that some reckoning will soon be at hand. According to Newmark Knight Frank's 3Q 2017 office market report there was 2.1 million square feet of net absorption of Class A property type in the first 9 months of 2017. This compares to 354,657 square feet for the same period in 2016. However this growth was driven by trophy space demand, Senior Managing Director Sandy Paul tells GlobeSt.com.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
