Mike Watts, CBRE’s president of investor leasing in the Americas, was a guest on the latest episode of the REIT Report. Watts focused on trends in office supply and leasing, the impact of office conversions, tenant expectations toward amenities, and more.
Watts noted that CBRE expects new office deliveries in 2025 to be about 25% of what they were in 2019. Office deliveries are not expected to pick up in 2026 either. Lack of new construction at the top of the office market creates a ripple effect as demand shifts to lower tier assets. Class B office assets still retain appeal for certain office tenants, he pointed out.
Meanwhile, Watts described the tenant experience as “more important than ever,” with companies keen to create a positive work environment for all levels of employees, rather than just senior level staff. Also important today is the concept of “how the building meets the street,” he said, namely access to retail that meets the specific needs of tenants and that encourages companies to renew their leases.