Office buildings constructed within the past decade are more successful at maintaining occupancy in the new hybrid work environment following the pandemic.
A new analysis from CoStar Group revealed that new office construction has generated positive absorption while buildings that are 10 years old and older are experiencing severe losses – nearly 420 million square feet of occupancy – since the beginning of 2020. That loss – equivalent to losing the entire office inventory of the Dallas-Fort Worth Metroplex – surpasses anything the industry has observed in previous economic cycles, the analysis said.
Buildings in the 3 to 10 year old range are maintaining most tenants and occupancy, the report said. But even those buildings are seeing increased subletting availability as tenants show a preference for the newest construction.
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