Market Snapshot: Office (Part 2)

Market Snapshot: Office (Part 2) 

Weekly market intelligence data and insights for AE firm leaders.

Introducing the Market Snapshot series. This section will include sector-specific market intelligence data and insights to help AE firm leaders stay informed. 

Last week’s post featured overview, size, and outlook information about the office market. If you missed it, you can check it out here. This week we will cover drivers, trends, and hot spots.

Drivers

Micro drivers:

• Number and size of companies that require office space, which are primarily in professional, business, and government services (major tenants are typically finance, insurance, and real estate firms)
• Office rental vacancy
• Adaptation to remote work model and flexible workspace environments
• Availability of 5G networks and advancements in remote technologies

Macro drivers:

• Value of private nonresidential construction
• Corporate profits
• Yield on 10-year Treasury note
• Population movement between dense/urban and suburban areas

Trends

• Office renovations will integrate the remote and in-person employee experience. While most employees are willing to work in office at least a few days a week, workers and companies continue to adapt and adhere to remote work, work from home, and hybrid models with flexible workspace environments. 
• Equipment, technologies, and expertise on building operations and HVAC systems may need to be adapted to meet the requirements for flexibility and wellness within office environments. 
• Data-driven design and space concept testing will increase. Augmented reality is an increasing trend being used for commercial office designers and developers.

Hot Spots

• MEP services, including demand for sophisticated HVAC systems 
• Lighting design services
• Areas/sectors/companies focused on:
  • Sustainability goals
  • Stringent energy code requirements
  • LEED certification
  • Strict in-office work policies (low tolerance for remote work)
• Urban markets with strong population growth will likely have feasible opportunities for office design and construction.
  • The latest U.S. Census data show these states among the top 10 in both numeric and percent population growth: Florida, Texas, South Carolina, North Carolina, Idaho, Arizona, and Utah. 

To learn what’s ahead for other markets, don’t miss our January 24 online event: Morrissey Goodale’s 2023 Market Outlook for the AE Industry. Click here for details and registration.

For customized market intelligence and research, contact Rafael Barbosa at [email protected] or 972.266.4955. Connect with him on LinkedIn.