Jeff Kemp CPA’s Post

# 🤔🤫 Hybrid Work & Office Space # Converting office space to an alternative use is the first thing that comes to mind, especially office-to-residential conversion, considering the issues with housing shortages and affordability that are plaguing many big cities. The problem is, converting an existing office building for residential use isn’t easy. The hurdles include structural differences between an office and residential building, making it hard to convert existing office space unless fully torn down.

Not a surprise to many of us, but this is a significant trend that will likely continue. While the Commercial Office Market is shrinking, the Federal Gov’t Office Market usually follows but lags behind. I think adaptive reuse is the opposing growing trend; that is, converting office space to residential or other use space. It will be interesting to see how the Federal Gov’t market (GSA will set the trend) moves with either a decline in office space or some type of adaptive reuse; likely a combination of both.

We have office today!! Here is a look at the number of office buildings being converted to other uses and it doesn’t look like much. There are a lot more planned but it is still relatively small scale in comparison to the total market. 

"California Sees Increase in Adaptive Reuse of Office Spaces" Read the full article below..

The office space landscape is evolving as reports show US office space shrank for the first time in history last year. More space vanished than emerged, raising concerns about the future of office investing. Vacancy rates remain high, with no clear resolution in sight. While the trend sparks interest in multifamily units as an alternative investment, the game isn’t over for office spaces. The big question is, will this shift reshape the real estate industry altogether? A deeper dive: https://ow.ly/aHa350PLKJO

https://lnkd.in/gFm-XEqB Here is another question that we come across frequently: “How many square feet do I need per person in my office space?” There are a couple of things to take into consideration when calculating the amount of space necessary for every person including your desired space layout and the parking ratio of the building. Here is how they come into play when determining this number:

In summary... "This indicates that by 2027, newer, first-generation space, typically considered to be buildings less than a year to three years old, could represent as little as 1% of total inventory, down from 2.4% today, which also matches its average share during the 2010s. This would be the lowest share of new office space on record and suggests there may be precious little supply of new inventory available to meet the needs of occupiers seeking workplaces in the latest and greatest buildings." 📉 It will be interesting to see how the shrinking volume of new office construction affects the remaining office supply existing outside of that 1%. Adaptive reuse, capital infusions and creative solution strategies will be paramount in successfully transitioning to the new office market that is in the beginning stages of unfolding. #office #cre #commercialrealestate #officeleasing #officemarket #newconstruction #officesales

🏢 Navigating the Office Space Real Estate Shift: A Looming Shortage in High-Quality Spaces In a surprising turn of events, the office space real estate market is gearing up for a potential shortage, particularly in elite Class A trophy properties. Despite the broader narrative of a declining market, CoStar Group's analysis points to a vibrant sector for premium office spaces, outpacing pre-Covid activity levels. 🔍 Key Insights: * Market Dynamics: Older vintage buildings are being sold at steep discounts, while the demand for modern, premium amenity-rich office spaces is significantly rising. * Leasing Trends: There's a notable increase in leasing activities in the high-end office market, suggesting a shift in business workspace preferences. The data presents a compelling picture: as companies return to more traditional office setups, the competition for top-tier office spaces in urban markets is intensifying. This trend is not just a blip but indicates a deeper transformation in the way businesses view and utilize office spaces. 🚀 Strategic Implications for Investors: * Investment Shifts: This trend presents new opportunities, especially in the realm of trophy-quality office projects such as 531 Bryant nearing completion by Urban Land Development, LLC in South Park in San Francisco. * Adapting Strategies: Investors and owner operators might need to reconsider their focus, potentially pivoting towards Class A properties to capitalize on this demand. 🔗 In-Depth Analysis: Gain a fuller understanding of these market changes here: https://lnkd.in/gXAt6z5f #SanFrancisco #ClassA #realestate #OfficeMarketUpdate Susan Sagy Melvin Mendaros Raymond Wong Bill Lee Julie Chase

The type of market that can benefit from repurposing office space largely depends on the specific location, size of the space, and local demand. Here are a dozen ideas to jump start your thinking. https://bit.ly/414QgsB