Downtown office vacancy

dukuboy1 · Post by **dukuboy1** » Mon May 17, 2021 5:18 pm

will be interesting to see for sure. I work for Commerce bank and I know that there will be a lot of hybrid workers at first. I think there will be flexibility but eventually we will see a return to the office, as the uniqueness of working from home wears off. Certainly helps from a convenience standpoint especially with child care and for people who live in the far flung suburbs. I think it will be interesting. One thing that might come from it is that office work spaces become a little more spacious. Instead of cubicles stack on top of each other and or desk areas, separated by small walls like in a call center environment, we may see new layouts. No longer will you need to pack as many people in the building as possible, opens up some quality of workspace life potentially. Businesses may lease the same space but use it in better ways and could provide more perks for employees. Will some companies choose to downsize space, I'm sure there will, but I think the rules will be re-written in the next couple of years. We have already seen the trend of open workspaces with areas for collaboration, but creating a fun, comfortable environment, where workers feel at bit more cozy to improve productivity.

earthling · Post by **earthling** » Thu May 27, 2021 4:04 pm

Colliers' Q1/2021 National Office Report. Claims downtown KC vacancy is lowest in Midwest (they include Midtown/Plaza for 'downtown'), however Class A vacancy is above Midwest avg. And their vacancy numbers are 'direct' vacancy, not including sub-leases which has picked up significantly everywhere in the last year (65% increase US avg).

National report..
https://www.colliers.com/en/research/of ... ok-q1-2021

edit: Colliers KC Q1 report...
https://www.colliers.com/en/research/ka ... ice-trends

earthling · Post by **earthling** » Wed Jun 30, 2021 3:08 pm

Newmark claims better downtown absorption for Q1 than other reports. Might be because they appear to include medical buildings while most other reports don't.

https://www.nmrk.com/storage-nmrk/uploa ... Market.pdf

earthling · Post by **earthling** » Wed Jul 07, 2021 4:32 pm

Cushman Q2 report, they don't track Class C or other types of buildings that Colliers tracks. Not surprising that vacancy continues to rise and will likely be US avg for a while. Downtown hits over 18% vacancy with CC/Xroads representing more than that but Loop had negative absorption this Q. Northland continues to suffer most in metro with over 30% vacancy. JoCo leads negative absorption YTD, over half metro losses.

https://cw-gbl-gws-prod.azureedge.net/- ... 4ddbc391d5

earthling · Post by **earthling** » Thu Jul 08, 2021 9:10 am

JLL Q2 report. As expected, subleasing picking up adding to vacancy, in line with WFH hybrid trend...

Two large sublease blocks in the CBD and South JoCo hit the market
and caused sublease vacancy to nearly double.
• Net absorption remained negative in Q2, driven largely by sublease
space being vacated and tenants downsizing due to increased work
from home.
• As tenants emerge from the COVID-19 shelter-in-place order and start
to rethink their real estate footprint, a shift to higher quality space is
taking place.

Evergy is downsizing within One Kansas City Place and listed up to 107,500 s.f. for sublease this quarter. SelectQuote is also
downsizing and listed over 70,000 s.f. in the Overland Park Xchange building for sublease. These large sublease blocks caused the sublease vacancy rate to nearly double from Q1 to Q2. Evergy and SelectQuote exemplify a larger downsizing trend as some business functions will permanently work from home while other employees will utilize a hybrid schedule. The continued trend of downsizing coupled with moves to owner-occupied buildings while interest rates remain low is causing further negative absorption and a heightened vacancy rate at 15.6% this quarter.

Companies continue to re-evaluate their space and consider how to incentivize employees to return to the office. This quarter One Digital and
Principal Insurance signed leases at the newly constructed, Class A CityPlace I, both relocations represent a move to higher quality space. First
Federal Bank also signed a lease to move to the Class A, mixed-use Park Place development. Like many companies are considering, First Federal
was able to embrace a work from home/hybrid model and capitalize on the tenant favorable market with a move to a high-quality asset.

https://www.us.jll.com/en/trends-and-in ... ansas-city

earthling · Post by **earthling** » Tue Jul 13, 2021 6:26 am

Newmark Zimmer Q2 report. Negative absorption expected for next 3-4 quarters...
https://nmrkzimmer.com/sites/default/fi ... Office.pdf

AlkaliAxel · Post by **AlkaliAxel** » Tue Jul 13, 2021 2:26 pm

Is that good or bad?

FangKC · Post by **FangKC** » Tue Jul 13, 2021 2:30 pm

Bad for now.

earthling · Post by **earthling** » Tue Jul 13, 2021 2:41 pm

Cushman also expecting negative absorption through mid-2022. It's not just a KC thing and we may track better than US avg. Many larger markets appear to be hit harder, though could benefit some in the long run with lots of available space for relocations when the dust settles. KC might be better off pandering to work from anywhere workers than to HQ relocations.

earthling · Post by **earthling** » Thu Jul 15, 2021 9:57 am

Cushman National Q2 report. KC metro vacancy still below US avg but negative absorption increasing again. Cushman only tracks about half the office space of Colliers. Colliers report won't come out until next month.

https://www.cushmanwakefield.com/en/uni ... at-reports

normalthings · Post by **normalthings** » Sat Jul 17, 2021 7:50 pm

Love the speculative Edison office building in OP. Wish we built something like that in Crossroads or at the Riverfront.

TheLastGentleman · Post by **TheLastGentleman** » Sat Jul 17, 2021 8:18 pm

It's not bad. The north loop area needs this stuff more than anywhere else

earthling · Post by **earthling** » Mon Jul 19, 2021 10:37 am

CBRE Q2 report. Northland over 44% Class A vacancy, ouch. Plaza and S JoCo showing negative absorption worse than previous quarter. South MO side only area showing positive absorption so far this year. Downtown vacancy over not so good 18%.

https://www.cbre.us/research-and-report ... ew-Q2-2021

earthling · Post by **earthling** » Fri Jul 23, 2021 7:41 am

As expected, office conversion to residential increasing even to the burbs with older buildings. If office demand conditions shift to higher quality but less space, lower Class B/C supply via increased conversions could help entice Class A spec projects. For now Class A subleasing is outpacing that shift but over next few years the landscape of office space might change, including higher demand for nicer or unique flex space (like WeWork/Plexpod). Large companies elsewhere that have or enter with local KC offices are expected to trend relatively more toward flex spaces than before.

https://www.bizjournals.com/kansascity/ ... mp-up.html

earthling · Post by **earthling** » Tue Jul 27, 2021 5:05 am

According to Cushman report, national office occupancy is returning but only to 32% end of June. Likely higher than average in smaller markets and lower in most larger markets, especially downtowns.

https://cw-gbl-gws-prod.azureedge.net/- ... 9DBBA33537

earthling · Post by **earthling** » Sat Jul 31, 2021 8:17 am

CBRE Q2 National Report
https://www.cbre.us/research-and-report ... es-Q2-2021

KC above US average with office using employment growth. It's relative to a significant dip last June that widely varied per market. Would also like to see since June 2019 or before pandemic impact Feb 2020....

Manhattan still struggling. Dallas has the worst downtown vacancy, over 30%.

earthling · Post by **earthling** » Fri Sep 10, 2021 8:00 am

Colliers' Q2 National reports. They say KC has the lowest office vacancy of larger office markets. Though still rising.
https://www.colliers.com/en/research/of ... ok-q2-2021

normalthings · Post by **normalthings** » Tue Sep 14, 2021 4:20 pm

Copaken updated their listings for BOE and 13 Grand. Nice new photos. Marketed as a great HQ sites

earthling · Post by **earthling** » Thu Sep 16, 2021 7:14 am

More indication WFH could impact office reduction longer term...
https://www.bizjournals.com/kansascity/ ... vings.html

"The survey of 1,250 businesses by Digital.com found 39% of surveyed companies said they were considering closing some of their additional office space within the next six months – a decision fueled by desires to cut costs and the rise of remote work."

"...only 14% of companies surveyed said they would require full-time returns to the office."

beautyfromashes · Post by **beautyfromashes** » Thu Sep 16, 2021 7:33 am

earthling wrote: ↑Thu Sep 16, 2021 7:14 am More indication WFH could impact office reduction longer term...
https://www.bizjournals.com/kansascity/ ... vings.html

"The survey of 1,250 businesses by Digital.com found 39% of surveyed companies said they were considering closing some of their additional office space within the next six months – a decision fueled by desires to cut costs and the rise of remote work."

"...only 14% of companies surveyed said they would require full-time returns to the office."

Why do I feel like this is just a big business messaging for layoffs with technology making it easier to operate with less people in general?

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