A New Normal Doesn't Raise All Boats Equally
We can add another set of abbreviations to our lexicon. A newly released report from CBRE talks of HHBs—hardest-hit buildings—those most severely impacted by the pandemic and those left with the longest road to re-occupancy. Of course, as recent BOMA research shows, property owners and managers are aware of changes accelerated during the COVID-19 pandemic and are taking steps to correct drivers of slow-to-recover assets.HHBs represent a small category of properties, but they pack an impactful wallop, according to the report, which puts the average number of HHBs at roughly 10% of a market. But “they accounted for 80% of the vacant space added to the US office market during the pandemic (Q1 2020 and Q4 2022).”
There are commonalities shared by HHBs, but surprisingly age is not among them. “Like most of the country's total office inventory, the majority of HHBs were built between 1980 and 2009,” and pace out to between 100,000 and 300,000 square feet, says the report. Not so surprising, the general location of these struggling assets was in higher crime areas with a dearth of amenities like eateries and shopping.
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