^ Interesting
Pre-Covid and post-Covid
My feeling on this keeps going back and forth. I worry about the demand for city living, but ultimately I think the city’s amenities will win out and this will end up being more of a hiccup.
Check out the Economy thread where Chicago Business Journal is reporting that office demand has already returned to pre-pandemic levels
Bear in mind that this probably doesn’t take into account significant rent reductions and other sweeteners office landlords are forced to offer to bring in tenants, paralleling what apartment landlords are having to do. So even though 95% occupancy looks great on paper and makes us feel that things are back to “normal”, the lowered rents and concessions DO have a negative impact on price valuations of all of these buildings, ultimately reducing the amount owners and developers can leverage against.
These lower rental comps ultimately make it harder for new projects to pencil out. It won’t be occupancy that will really tell us when we are back from the doldrums of the pandemic. It will be rent/SF
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