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Obsolescence Equals Opportunity

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Much has been written about the potential death of the office, with justifiable concern that some office properties may never again be fit for their original purpose. Running counter to the doomsday narrative is Cushman & Wakefield’s new publication, Obsolescence Equals Opportunity. In it, we offer a perspective focused on the upside potential for owners who are able to meet the market’s call to action. 
This study breaks new ground by quantifying the U.S. office market for its potential, with current and anticipated supply juxtaposed against trends in demand. We find an unprecedented imbalance in supply and demand which, by the end of the decade, will result in a surplus of 330 million square feet of vacant office space that hasn’t kept pace with demands to support hybrid working and efficiency/ESG priorities.  The imbalance in demand is further accentuated by a growing quality gap: demand for high-quality office product that can accommodate hybrid strategies and provide a strong in-person experience is dramatically higher, while demand for product that cannot meet modern-era tenant requirements is dramatically lower. 

Shifting Opportunities 

While the bulk of office space in the U.S. needs to consider its competitive positioning, not all is lost for those facing headwinds. Owners and investors focused on proactively addressing such challenges will be able to recover value and generate returns. By exploring opportunities to reposition or repurpose, no shortage of opportunity exists with the right partners for strategy, funding and execution. Through case studies and deep dives into the sectors such as life sciences, healthcare and multifamily, Obsolescence Equals Opportunity explores alternatives for repositioning and repurposing. 


Repositioning strategies are among the least costly and most efficient strategies for bringing an obsolete office property up the value and relevance curve. However, it does require experience and insight to ensure any investments are the right size and in the right areas to meet tenant demand in the local market.  


Depending on the market, submarket or property, an asset may not be a strong candidate for repositioning strategies, either due to the competitive landscape or due to the building’s physical characteristics. Owners of assets that are candidates for repurposing should thoroughly estimate project costs, demand-side potential and exit value assumptions in the next part of the evaluation phase. 


Abby Corbett

Head of Investor Insights
Denver, United States

+1 (720) 2441061

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Kevin Thorpe Washington DC Chief Economist
Kevin Thorpe

Chief Economist
Washington, United States

+1 (202) 266-1161

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David C Smith (image)
David Smith

Head of Americas Insights, Global Research
Atlanta, United States

+1 (404) 853-5310

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