A Rising Interest in Building Repositioning
To say the market for tenants is competitive these days is an understatement. Over the past few years, we have seen a flight to quality as new construction is coming online and tenants have shown a willingness to pay premiums for updated design and modern amenity packages. As reported by Colliers International earlier this year, some 3.6 million square feet of office space is under construction now and set to deliver in the coming months.
So what is a Class A or B landlord to do? Property owners have recognized that in order to retain existing clients and/or attract new tenants, they must invest in capital improvements to enhance common areas and expand offerings. The exception to the amenity component seems to be those assets located adjacent to restaurants and retail, such as those in the Central Business District. However, at a minimum refreshes of finishes and flow remain critical to their future success.