London-based research firm Capital Economics predicted that the U.S. office building values would not return to pre-pandemic levels until at least 2040. Many office landlords, including Brookfield and Blackstone, have already missed payment on some of their office properties. The report expects property values to slump around 35% from their peak by the end of 2025. - According to Deputy Chief Property Economist at Capital Economics, Kiran Raichura, demolitions and conversions of the worst assets could partially negate the impact on valuation-based indices.
- He added that landlords have to bear the cost of conversion, so their future looks challenging.
- The trend is similar to the collapse of shopping malls following the emergence and growth of e-commerce.
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