New Poll Finds Half Of Major Corporations Plan To Cut Office Space As CRE Turmoil Rages On
A few weeks ago, Goldman revealed the “most accurate” reading of the current commercial real estate market, pointing to a 25% plunge in office property values. Adding more to this nightmarish outlook is a new Knight Frank poll showing that major corporations expect to reduce global office space footprints over the next several years.
Bloomberg said the poll of 350 real estate leaders at international firms found half of the largest companies with total workforces of over 50,000 employees are expected to cut their office space footprints by 10% to 20% within three years.
“Now that we are in a truly post-pandemic world, corporate decision-makers are ‘removing the blinkers’ and making clear decisions around their future corporate real estate strategy based on a broader array of business issues than just the pandemic,” Knight Frank global head of occupier research Lee Elliott said
The poll signifies continued downward pressure on office spaces and high vacancies at a time refinancing for the CRE space is more challenging, which could lead to a significant downdraft in property prices.
We have already laid out to readers major liberal cities have an office space vacancy crisis:
… and then there’s this:
Already, CRE prices have tumbled into a downturn as property values are sliding for the first time since 2011.
As for Goldman’s “most accurate portrayal of current market conditions,” their analysts are looking at Green Street data that foretells the coming price plunge in office and apartment property values.
And remember, as regional banks began imploding in March, we noted, “CRE Nuke Goes Off With Small Banks Accounting For 70% Of Commercial Real Estate Loans.”
Owners of office buildings need to quickly consider transitioning their buildings to multi-family units as post-Covid work trends shake up the CRE market.
Tue, 06/06/2023 – 13:05
via ZeroHedge News https://ift.tt/5lfzMkv Tyler Durden