Analysis presented at CoStar’s recent Third-Quarter 2013 Office Outlook and Forecast found that developers added 39 million square feet of new office space over the last four quarters. However, the net impact was muted as another 22 million square feet of office space was removed from the market, either demolished or converted into other uses, with more than half of that former office space being converted to residential uses such as apartments and condominiums.
"Clearly, we see a shift in how real estate is being used and what developers are building," said Walter Page, director of office research for CoStar. "So far, over half of the office recovery has been driven by removals of space. We’re still at a very low level of [net] completions, due mostly to demolitions."
Read more...Developers Increasingly Find It Can Pay To Convert Office Buildings Into Apartments and Condos - CoStar Group