Originally published on October 20, 2023, by Victor Whitman for NAIOP.
The office market is still struggling with high interest rates and high levels of remote work, producing a tough lending environment and frozen deals on the sales side, and generous concessions and terms that favor tenants on the leasing side.
In tech hubs like Seattle, the market has been getting worse. That said, there are glimmers of hope, according to office experts at NAIOP’s CRE. Converge 2023 in Seattle.
On the panel were moderator Phil Mobley, national director, U.S. Office Analytics for CoStar Group, Inc.; Todd Battison, senior vice president and shareholder, Kidder Matthews; and Jason Flynn, CFA, managing director, Eastdil Secured.
The panelists said the office market has been evolving post-pandemic as companies figure out how they plan to use office space. Unlike downturns and upswings in the market, the office sector is likely seeing a permanent change in companies’ office usage. How it all shakes out is not yet clear, but traditional office does have future, they say.
“One important point here from talking to other professionals is that we’re not just talking about a cyclical downturn, we’re talking about a paradigm shift, how people value the office, how often they come in the office,” said Battison.