Despite a rise in hybrid work arrangements, the physical office is here to stay – and data captured over the course of the pandemic reveal that occupiers are choosing newer, better Class A product as they decide where to put down stakes. 

"The physical office will continue to have some role to play in the future of work," Cushman & Wakefield economist Rebecca Rockey says in a new report outlining the future of the sector across the country. "And although there are a myriad of occupiers with vastly different needs, we know that newer, better quality office product, which usually outperforms, did so to a greater degree during the pandemic. And that trend is expected to stick."

Historically, Class A office product has outperformed, whether during expansions or recessions or within CBD or suburban submarkets. And during prior expansions, Rockey says, Class A office product accounted for a "disproportionate amount" of absorption relative to other product types, clocking in at a growth rate of 1.7 times its share of inventory. After the Dot Com bust, Class A office accounted for 61.6% of all absorption and 35.7% of the inventory and after the Great Financial Crisis (GFC), these shares were 78.4% and 45.0% respectively, she says.