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Will office demand rebound in 2022 after finishing 2021 on strong note?

Jan. 16, 2022 10:24 AM ETCity Office REIT, Inc. (CIO), DEA, OPISLG, VNO, HIW, BXP, CUZ, PDM, PGRE, JBGS, SP1500-60101040, ONLBy: Liz Kiesche, SA News Editor4 Comments

Interior Of An Empty Modern Loft Office open space

pidjoe/E+ via Getty Images

  • Demand for office space finished 2021 on a strong note, and is likely to pick up on the second half of 2022 as workers continue to head back to the office, according to the National Association of Realtors' research

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Comments (4)

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BeaBaggage profile picture
long $ALX will add on dips..great bal sheet to weather weakness and good yield, strong assets etc.
Weighing Machine profile picture
The story in office is less about gateway vs. sunbelt and more about newer Class A buildings with modern amenities /modern floorplans / ESG certifications versus older Class B and below which need to be heavily reconfigured/upgraded (lots of capex) or totally repurposed (likely at inferior economics).

My favorite pick in the space in KRC - newest portfolio (avg age 10-11 years) of Class A office leased to leading tech companies. Also looking out a few years, 1/3 of their NOI will come from life sciences (segment is on fire and rents are steadily increasing) and multifamily. Shares trade at 30% discount to NAV as it is lumped into the 'office category' despite best in class office and ongoing development (at accretive yields) of life sciences
@Weighing Machine sounds quite promising. Thank you for the advice, I'll take a closer look into KRC.
SeriousGoldBUG profile picture
@Weighing Machine agree - Cl B /C will struggle to maintain occupancy & rents.

As we saw with SLG's One Vanderbuilt in NYC, top quality class A is setting all time highs for rents as leading corporations use attractive workplaces as a tool to bring skilled workers back to the office
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