Snapshots
Top markets have removed 5% of stock since 2020; redevelopment intensity varies
December 03, 2024
Contributors:
- Jacob Rowden
- Conversion and redevelopment of underperforming office properties has accelerated in recent years but has played out at different intensities in different regions.
- Conversion activity has been most intense in markets with strong incentive programs, cities with a large share of pre-war office buildings, and major life science hubs that saw a wave of office-to-lab conversions during the early stages of the pandemic.
- Gateway markets that were early adopters of office-to-residential incentive programs have been the primary markets for inventory removal—New York, Washington, DC and Chicago have collectively removed 43.6 million s.f. of office space since 2020, roughly 4% of inventory in the three largest U.S. office markets.
- Post-industrial markets in the Midwest have also been relatively active due to an abundance of high-vacancy pre-war office buildings which are well suited for conversion: Cincinnati, Cleveland, Detroit, Milwaukee and St. Louis have removed a combined 14.4 million s.f., or 5.4% of inventory since 2020.
- Outside of San Diego’s office-to-lab conversions, no markets in the western U.S. have exceeded more than 2.3% of inventory removed since 2020; Orange County has seen the second-most active removals, with office-to-industrial redevelopments comprising most projects.
