Creative and mixed-use offices outperform as tenants target vibrancy
November 15, 2022
- Jacob Rowden
- Beyond physical asset quality, occupiers are increasingly prioritizing experiential factors and location context, driving resilience in demand for creative office assets and office within mixed-use projects, which have generated almost 9.0 million s.f. of positive net absorption across asset classes since the second half of 2021.
- A stronger leasing recovery, with gross leasing over the past 12 months only 20% below pre-pandemic averages, has led creative and mixed-use offices to generate a net gain of 3.5 million s.f. of occupancy since the outset of the pandemic, amounting to 0.9% of the existing supply.
- Creative office and mixed-use assets are often concentrated in off-core urban submarkets—areas like Manhattan’s Meatpacking District or Fulton Market in Chicago—which have benefitted from a more diverse mix of property types and generally lower density than the core CBD, driving demand from office tenants targeting more vibrant urban neighborhoods.