There’s been a rebound for Class A and A+ office properties. This comes after office reached bottom in 2023, with Colliers calling the asset class a “leader in year-over-year sales gains.”

However, that is the bright side. The shadier one showed up in the fourth quarter of 2024. According to MSCI, U.S. office vacancy rates reached a high of 19.7%. That is an average, and “there remain pockets of strong demand for high-quality, well-located assets.”

For properties outside of those pockets of strong demand, work on upgrades or redevelopment is likely necessary to make them marketable. MSCI said historical evidence supports the claim that office developments deliver stronger performance than stabilized properties. However, it found that the most effective change comes from acquiring assets, developing or redeveloping them, and then quickly selling them, not holding and operating the property.

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