A new report from Graceada Partners has found that value for downtown high rises will drop by 10% to 15% in value as demand for offices grows in secondary markets.
High rise buildings were once seen as a symbol of prestige, but many companies are looking to decrease their real estate footprint to better accommodate their newly distributed workforce.
This news comes as the future of the commercial real estate industry remains in a state of limbo and people flee from large, dense cities to the suburbs.
In the fourth quarter of 2020, the national office vacancy rate grew to 17.7% with large cities like New York City seeing the biggest decline.
However, as flexible working grows in popularity, the “outpost economy” will transform the market in areas like Austin and Charlotte as they see a spike in population.
Because of this, office demand will continue to grow in secondary markets, which could lead to companies relocating their headquarters or opting for satellite offices in these areas.
While this is good news for these markets, cities that have seen a decline in population and economy will need to strategize their real estate operations in order to attract professionals in the future.