Over the past two years, demand has increased for brand new, trophy office space rather than traditional Class A locations. Areas such as Uptown Dallas and DC are almost entirely absorbed, with rising construction prices and inflation limiting opportunity for new development.
As such, rents for new, trophy office space could double–even though rents for remaining Class A space have remained weak.
Looking ahead, Preston Young, National Head of Office Investor Services & Partner, has some key questions to consider:
- Will tenants stomach rent increases and pre-lease new development?
- Because of rising costs, will demand pivot to traditional Class A assets?
- If so, will there continue to be rent growth throughout the process?
Only time will tell!
Watch the video below for Preston’s full insights.