Consolidation of Demand for Prime Office Assets

The destruction of demand for lower-quality office space is leading to a significant increase in demand for prime office assets, resulting in a massive consolidation of demand. This consolidation is driving higher value and increased rents for the best office properties. Even in markets like San Francisco, owning top-tier office assets is still profitable, with leases being signed at rents higher than pre-COVID levels. As we move towards hybrid work models and AI companies flourishing, tenants are looking for office buildings that offer top-notch amenities to attract and retain them in the competitive market.