The Bright Side of Office: Growth Opportunities in the Urban Core

Key Takeaways

• The urban office market faces challenges in 2024, but there are bright spots in activity.
• Some of the demographic shifts at the height of the pandemic were temporary, as people still want to live in large, vibrant cities.
• Increased remote and hybrid work is shifting occupier demand, and reducing willingness of employees to commute, but much of that impact has already filtered through the system. Portfolio right-sizing will moderate in coming years.
• Top-tier office product is very much in demand. There is going to be less new construction delivered, however, opportunities arise for renovated offices and assets slightly further down the value chain.
• Occupiers are committed to the office as a part of their business strategy, even if they are offering more employee flexibility than they did five years ago. The office is still a central part of the economy and a driver of productivity, career development, culture and innovation.
• Many young employees want to be in the office because it is a place for connection and personal development. To appeal to workers of all ages, the office experience should focus on sustainable practices, superior technology and inviting amenities. 
• While the office job market has been lagging lately, job growth will return. As a result, occupiers will need to provide space commensurate with their expanding headcounts.