2024 Forecast: After a pandemic slump, demand is returning for office space
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Nate Stevens, a partner at the Boulos Co., says there is more confidence in the office market, making for more stability over the next 12 to 24 months.
Because of long-term leases in place at the pandemic’s onset, its full effects on the office market are yet to be realized. And, as a smaller market, Greater Portland is somewhat insulated from major economic influences.
The market, in general, is faring better than many larger metropolitan areas, which has historically been the case, said Nate Stevens, a partner at the Boulos Co., a commercial real estate brokerage in Portland.
Demand increased through 2023 — a good sign moving into the new year, he added.
And new supply is coming into the pipeline, mostly in the form of subleases turning over to direct vacancies.
“My opinion is that most office users are now more comfortable with how their company is utilizing their office, providing them with the opportunity to relocate, something they may have been wanting to do for a while now but haven’t been able to,” Stevens said.
Stevens noted that one client has committed to a new five-year lease for a larger space. Another indicated interest in constructing a new office building.
“This is really the first time I’ve heard this since the pandemic,” he said.
Some office space — typically older downtown Class B office buildings and occasionally Class A buildings, has been converted to residential, hospitality, education and light warehousing uses.
“This is a trend that started prior to the pandemic but was certainly exacerbated by the strong demand for downtown housing and the lack of supply post pandemic,” Stevens said.
Predictions are tricky for the region’s smaller market — one big deal or vacancy can shift the numbers quickly.
“That said, I think there is more market confidence than there has been in four years, which will make for more stability over the next 12 to 24 months, he said.
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