Lenders, investors taking a nuanced look at the office market
The sector as a whole saw a stream of negative headlines because of plunging demand after 2020, but the deep divisions in the office market have become increasingly clear.
Put simply: quality of space is all-important, according to Cushman & Wakefield. Its report showed that Class A office stock, the highest quality of buildings on offer, saw increased demand in more than half of all markets across the country in the second quarter.
“The persistent trend of strong occupier demand for high-quality space, coupled with a dwindling supply, is likely to continue,” it noted.
In April, BridgeInvest managing partner Alex Horn told MPA that Class A and some Class B office products are likely to see continued uptake – although a more complex outlook is continuing for other types.
“There are still a lot of challenges ahead, simply because how we use offices as a country has changed,” he said, “especially in those B and C offices.