The Winter 2024 Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey, released on Wednesday, reveals a growing trend of adaptive reuse among office properties. According to the survey, 21% of real estate owners and operators in California plan to repurpose existing office space for multifamily, industrial or retail use over the next three years.
Experts predict that the recovery of the office sector will not be complete until late 2026. This highlights a lack of confidence in this market as factors such as high interest rates, declining property values and remote work continue to impact offices across the country.
John Tipton from Allen Matkins states that due to underperforming offices in many areas, there is now more focus on converting older or obsolete buildings into more profitable uses like housing or mixed-use developments. While financial challenges remain for these projects in 2024, there is expected growth in converting offices into spaces that better support local economies both within California and nationwide.
This article was originally published by Connect CRE.
