Office Apocalypse Averted? U.S. Office Market Gets a Face-Lift!

Houston We Have a Problem...Solved?

Alright people Ripley here. Heard some noise about the U.S. office market. Seems like it's been screaming louder than a facehugger latching onto a colonist these past few years. But get this – CBRE's saying we've hit an 'inflection point.' Translation? Things are finally starting to... change. And not the bad alien bursting out of your chest kind of change. More like...renovations.

More Wrecking Balls Less Skyscrapers

For the first time in forever (or at least 25 years which in space years is like a coffee break) they're tearing down and converting more office space than building new stuff. 23.3 million square feet gone by the end of the year versus a measly 12.7 million popping up. That's like finally getting rid of all the Chestburster stains after a long haul. Makes a girl feel a little better you know?

Vacancy Rates: Still High But Climbing Down

Of course all this is because everyone's working from home in their underwear (probably). Office vacancies went through the roof hitting a record high around 19%. But hey companies are starting to drag people back in kicking and screaming and net absorption is actually *positive* for four quarters running. Positive! Someone get me a celebratory mug of that synthetic coffee Ash used to brew. It's a miracle!

Leasing Activity: A Shot in the Arm

Leasing activity's up 18% from last year. Eighteen percent! It's like finding a working flamethrower when you thought you were completely screwed. And prime office locations? Class A space? Rents are recovering. The big boys – Vornado BXP the whole shebang – they're gonna be alright. They always are aren't they? Sigh. Still...progress.

Apartments From Ashes (or Office Cubicles)

And the real kicker? They're turning old offices into apartments. Since 2016 they've squeezed out about 33,000 apartments and condos. That's a lot of screaming babies to replace the screaming executives. Another 43,500 units are in the works. Maybe we can finally get some decent housing for all those space truckers.

The Fine Print: It's Still Gonna Be a Grind

But hold your horses. CBRE's Mike Watts warns that this conversion trend ain't gonna be a walk in the park. Good conversion ready buildings are gonna be harder to find and construction costs are still through the roof. So you know same old song and dance. Still at least something's happening. Just remember people: 'I say we take off and nuke the entire site from orbit. It's the only way to be sure.'...Or you know maybe just convert it into a nice apartment complex. Your call.