06/29/2023
| by
Sarah Borchersen-Keto
Julie Whelan, global head of occupier research at CBRE, was a guest on the latest episode of the Nareit REIT Report podcast.
During the interview, Whelan discussed broad office occupancy trends, changes in how office space is utilized, the flight to quality, the role of flexible office space, the importance of an office’s location, and more.
Among Whelan’s key takeaways were:
- Net effective rents, that account for landlord concessions, are continuing to grow at the top tier of the office market.
- In some cases, the rent differential between top quality and lower quality office space has never been greater.
- A great office building alone isn’t enough. “Buildings have to be in great submarkets right now,” and that means mixed-use environments.
- “The office has a really exciting role to play in the future of how cities are reinvented.” Office space is going to be in a transformative phase as it plays a key role in the evolution of mixed-use locations.
- In markets like New York and Chicago, midweek occupancy can be as high as 65% to 70%.
- Employees want flexibility not only of the days they work in the office, but also the hours.
- The average size of an office lease transacted today is 28% smaller than before the pandemic.
- Landlords are more willing today to negotiate highly flexible options into their lease agreements.