Office odyssey: A charted exploration of value correction in major U.S. cities’ office buildings

graph of average price per square foot in office sales in major U.S. cities from 2018 to 2023
  • The correction in office values in the wake of the COVID-19 pandemic has been a hot topic of conversation over the past four years, as utilization trends have fundamentally shifted, causing the sector to face a unique set of challenges. This includes cyclical issues stemming from an elevated interest rate environment, and the impact it has on cash-flowing assets. Until interest rates have returned to more normal levels, values will remain uncertain.
  • Over time, markets have shown varied pricing trends based on geography; one notable example is the Miami market, which is the only analyzed market to show positive pricing momentum year over year, reaching roughly $575 per square foot on average, almost the same as San Francisco.
  • With a large amount of loans maturing in 2024 and over $500 billion by the end of 2025, capital events are imminent and will serve as an early indicator for value corrections.

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