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Report: Office Parks Increasingly Obsolete

According to a report prepared by commercial real estate firm Newmark, Grubb, Knight and Frank (NGKF), the office park model has lost the competitive edge. That is, unless it provides access to transit and urban amenities as well as parking.
January 2, 2016, 5am PST | Philip Rojc | @PhilipRojc
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A white paper released by NGKF details a shift in the market for office space. The suburban office park, in its current form, is in danger of obsolescence. "More than 1,150 U.S. office properties — or 95 million square feet — may no longer pencil out, the authors estimate, though a number of those can be salvaged with some changes," writes Angie Schmitt in explaining the report's findings.

The market shift lines up with an increasingly urban professional class interested in urban amenities. "'Walkability and activated environments are at the top of many tenants' list of must haves,' the report states. Office parks in isolated pockets without a mix of uses around them must have 'in-building amenities' – including a conference center, a fitness center, and food service — to remain competitive."

However, the pivot away from suburban priorities should not be overstated. Schmitt adds: "Parking was also important to the marketability of buildings in suburban Denver. The report notes that a lot of older management personnel prefer to drive, while younger workers want transit access. So buildings that offered both were in the highest demand."

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Published on Thursday, December 10, 2015 in Streetsblog USA
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