The suburban office market is probably the least volatile product type right now. However, make no mistake, rental rates are trending higher. This is partly due to reduced supply, and partly due to new ownership of a number of buildings. The new owners are performing Real Estate 101 type activities: refurbishing common areas (lobbies, public corridors, bathrooms, etc.) as well as parking lots, landscaping and are adding or refurbishing amenities, such as cafeterias, fitness centers and conference centers.
Construction costs for space interiors have gone up significantly in recent years, along with the quality of finishes for tenant spaces. Carpets, doors, kitchen cabinets, countertops and other components have generally been upgraded to reflect today’s tastes.
