We may be heading toward an oversupply of creative office space. While demand for creative office—in this sense the term applies to all open-plan and highly designed offices—is dominating the market, there has been a recent increase in the sublease supply. Now sublease rents are decreasing, and it could soon impact the direct leasing office market.
“If developers continue to build creative-type office buildings and landlords continue to renovate warehouse space, there will be an oversupply of creative office space on the market. I have no doubt about it,” Ian Strano, EVP at NAI Capital, tells GlobeSt.com.
The sublease market is the primary indicator that we could be heading toward an oversupply problem. An NAI Capital report released earlier this month showed that sublease supply is increasing and sublease rents are coming down. “A majority of the sublease supply on the market is creative office space,” adds Strano. “It isn't just general office space that people are giving up; it is true creative office space of warehouse conversions.”
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