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Office Space Removal Projected to Outpace Construction in 2025
Office conversions and demolitions in 2025 will exceed new construction for the first time in at least 25 years, CNBC’s Diana Olick reported Monday, citing CBRE data. Across the largest 58 U.S. markets, 23.3 million square feet of space is slated for demolition or conversion to other uses by year’s end, compared to completed development of 12.7 million square feet of office space in these markets.
“This net reduction – albeit slight – of office space across major markets likely will contribute to lowering the vacancy rate in the quarters ahead, which would benefit building owners,” Mike Watts, CBRE Americas president of investor leasing, told CNBC.
Developers also have another 85 million square feet of office being readied for conversion in the next few years, reported Olick. Since 2016, office conversions to multifamily residences have generated about 33,000 apartments and condominiums, with about 43,500 units in the pipeline from conversions already underway.
- ◦Development
