Developers question condo conversions as office demand rises

Class B and C space shrinking as tech and creative firms seek space

TRD New York /
Jul.July 14, 2014 11:30 AM

An influx of tech startups and creative firms is making developers think twice before converting office space into condos.

Whereas condominium and hotel conversions once commanded bigger returns, the growing demand for Class B and Class C office space — which is being fueled by high growth companies — has changed that calculus, the Wall Street Journal reports.

“The office market is starting to gain enough momentum in the next couple years where we’re going to see office market become a better value than residential conversion,” Josh Kuriloff, a senior broker at Cushman & Wakefield, told the paper.

At the same time that demand for affordable office space is growing, supply is shrinking. The amount of Class B and C space could fall by 7.8 million square feet through 2025, according to an Economic Development Corporation report.

The average asking rent for offices in these classes is up five percent from a year ago to $45.93 per square foot, and up 15 percent from 2010, according to Reis Inc. data cited by the paper. [WSJ]Tom DiChristopher


Related Articles

arrow_forward_ios
Eric Gordon

Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world

Big Tech locations in NYC

MAP: Here’s a look at all the Big Tech locations in NYC

What will proptech look like in 2019 and beyond?

From left: RealPlus' Eric Gordon, Corcoran's Pam Liebman, Halstead's Diane Ramirez, Douglas Elliman's Howard Lorber and Brown Harris Stevens' Bess Freedman (Credit: Eric Gordon by Emily Assiran, Getty Images, Halstead, BHS, iStock)

Terra sells part of RealPlus stake to Corcoran and Elliman

“I can talk about erections all day”: NAR tech consultant’s bizarre fireside chat

Fears about privacy and Big Brother-like tactics in real estate are taking hold

John Burger: how tech makes real estate “more professional”

Elegran founder and CEO Michael Rossi, and a segment of the domain registry history for timewarnercentercondos.com

Elegran revealed as creator of fake building websites

arrow_forward_ios