US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

Office Space: A Surplus Is Trouble For Real Estate, but There Are Still Potential Opportunities for Commercial Renovation & Remodeling

The COVID-19 pandemic continues to reshape the commercial construction industry.

Many companies that the lease office space are continuing to keep workers operating remotely from their homes. While many businesses are still hoping to bring staff back in stages through 2021, some workers may never go back to a conventional office. The long-term leases that these companies have signed will protect the real estate companies from an immediate loss of tenants to a certain degree. However, many of these firms with long-term leases are offering their unused space to others, resulting in a sharp jump in efforts to sub-lease this unused office space to new tenants.

The flood of newly available office space for lease (or sub-lease) will put a damper on new office space construction, as excess capacity keeps a lid on rents and makes it difficult to justify new construction for investors.

However, commercial remodeling activity may get a boost as sub-leased space is reconfigured for new tenants. Additionally, even companies that are still retaining and planning to use their space are undergoing renovations to accommodate social distancing norms with more walls, improved ventilation and filtration, and additional entrances to minimize crowds of workers.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Pipe Products & Markets,Global Siding (Cladding),Commercial Roofing,Low-Slope Roofing,WPC & Plastic Lumber, and Global Elevators. Freedonia Custom Research is also available for questions requiring tailored market intelligence.