There is a reckoning coming for those office and even industrial property stakeholders that don't start retrofitting for what's coming. Not only are occupiers going to demand better, and will be willing to pay for it, the space needs to operate to the energy efficiency demands of what's coming for net-zero and to comply with the demands of local juridictions. Soon, tenants are not going to want to sign leases in buildings that don't meet certain energy efficiency standards. Workplace Wellness (natural light, air quality, flexible office construction) built-in and productivity enhancing spaces that inspire tomorrows workforce will be returning the best cap rates!
The #office market is clearly evolving, but it’s not simply due to changing demand. The other key component of this evolution is the changing dynamic of what office tenants value and prioritize today – which is quality. #Vacancies across the office market are heavily concentrated in lower quality products. The high-quality, modern office inventory – like Brookfield’s Manhattan West – is commanding higher rents than ever before. In fact, we’re seeing more blue-chip tenants and the highest rents we’ve achieved across our new developments on a global basis. The bifurcation of office is real, and the video explains this split and what we see ahead for office #realestate. 🏦
