BRAD NIELSEN, REAL ESTATE PARTNER
“The 'flight to quality' continues. Office building landlords with space available in upscale buildings (with state-of-the-art amenities) located in hot submarkets are very active right now. Most companies have realized post-COVID that having their employees work together in the office is best for their company. So to entice their employees to return to the office, companies are looking to lease space their employees want to work in (i.e., amenity-rich, accessible, and safe buildings), and they are willing to pay a premium for this space.”
JULIE HOFFMAN, REAL ESTATE PARTNER
“Office leasing activity was strong at the beginning of the year, but since the tariffs were announced, we’ve seen some tenants backpedal, taking more of a ‘wait and see’ approach as they consider their future needs for office space. Construction costs are up, and there is uncertainty about the economy in general. That said, the leasing trends we’ve seen in recent years seems to be continuing in 2025. There is healthy demand for space in Class-A trophy buildings in desirable areas, while some older, less competitive office buildings are being repositioned for mixed-use and other purposes.”
JOHN TIPTON, REAL ESTATE PARTNER
“The office sector continues to adjust to the new reality of more 'work from home' employment and businesses taking less rentable square feet per employee than previously. Notwithstanding the challenges of the past 5 years, the office sector is adjusting to this new reality (sometimes through the resetting of an owner’s capital basis in a project by foreclosure or a deed-in-lieu transaction) and there are now more investors considering allocating new capital to office projects in the “right” markets and at the “right” price.”
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