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Research and insights > ISA Focus: Revisiting the future of office
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ISA Focus: Revisiting the future of office

March 28, 2023
Brian Klinksiek, Chris Psaras, Dennis Wong and Heidi Hannah discuss the future of the office in the Americas, Asia Pacific and Europe.

The balance of virtual and in-person interaction is close to a post-pandemic steady state. So we observed in our ISA Outlook 2023, where we called this out as one of our key global themes for the year. We pointed out that after a long​ period of gradual improvement in office attendance, the rate of change has substantially leveled off, with weekly office visits stabilizing below 50% in many US markets, and at somewhat higher levels in Europe and substantially higher levels in much of Asia-Pacific.​

In many markets, but especially North America, work-from-home (WFH) headwinds have hit leasing demand as leases roll. An anticipated boost from permanent social distancing failed to materialize. At the same time, the cyclical outlook for job growth has weakened with the macroeconomy. These factors have contributed to deepening worries about the prospects for office values, which have made front-page news due to prominent defaults on commercial mortgages backed by office assets.​

In this context, we thought it important to revisit the prospects for the office sector, addressing key questions, while highlighting differences and similarities among global markets. Where are risks greatest and where are they less? How should we think about the role of office in the portfolio? How will current trends play out in the various regions where we invest?​

This is also an opportunity to look back on our predictions to assess where we got things right, and where we did not. As a part of this, we introduce a new feature in our ISA suite, “Looking Back”, in which we check on our prior predictions and forecasts.

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May 30, 2023 ISA Briefing: Controlling interest and keeping tabs on residential regulations Changes to rent regulations can potentially reshape the risk-reward profile of residential investments, impacting values over both short and long timescales.
May 19, 2023 European market view – Q2 2023 Our latest LaSalle European Market View shows how Europe’s economies and real estate markets are being impacted by, and adapting to, the current period of unusual uncertainty.
Apr 03, 2023 Fourth quarter private real estate returns move negative US private real estate returns went negative in Q4 2022 as the impact of higher interest rates continued to ripple through to market pricing and appraised values.

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