Obsolescence Equals Opportunity_final (002)

THE OFFICE SECTOR IS FACING A CRITICAL CHAPTER OF NECESSARY ADAPTATION, EVOLUTION AND RECALIBRATION. Just as retail didn’t die in the years following the e-commerce boom, the office sector is not in danger of demise. Recognizing the challenges and opportunities head-on and with a proactive, creative and strategic approach will help both existing ownership and the prospective investment community ensure the viability of millions of square feet of commercial real estate space.

REIMAGINATION STRATEGIES that have preserved income and capital value growth include both repositioning and repurposing options.

• Repositioning spans a variety of project scopes, including improving asset amenities, building out sustainability offerings as well as improving a property’s sense of place by creating community oriented offerings and events. • Repurposing extends across increasingly varied and creative project scopes, including everything from repurposing the property into multifamily (or repurposing a small portion of the property to multifamily), or repurposing properties into mixed-use options or industrial, life sciences or healthcare uses. ALL STRATEGIES REQUIRE CAREFUL EVALUATION of not only asset-specific qualities (such as property infrastructure and architecture, etc.), but also thorough understanding of the demand side characteristics of the market and submarket and the competitive landscape in which the target tenants are operating within. These secular changes are unfolding across the globe, though the changing dynamics of hybrid workforces are currently having larger impacts in North America, particularly in the U.S., more than other parts of the world. As a result, many of the trends in this report focus on the U.S. This is not to say that these trends and strategies don’t apply in Europe or Asia, but the scale of the challenges and opportunities is more acute in North America. Future phases of this study will focus on how these trends and opportunities apply in EMEA and Asia Pacific.

The Next Evolution of Office and How Repositioning and Repurposing Will Shape the Future | 5