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Office Sector Values Are In Flux & Utilization Is a Moving Target
Updated: Aug 11
Florida's Commercial Real Estate Is Still One Of The Strongest Bets In American CRE.
by George L. Rosario, Speaker, Business Development Director at Property Tax Alliance Group
The commercial real estate market has seen a lot of change in recent years. One sector that has been greatly affected by these fluctuations is the office sector. The nationwide trend of remote working due to the pandemic has shifted office values and utilization in unexpected ways, making it difficult to predict how this sector will fare in the future. In this blog post, we'll discuss the current state of the office sector in commercial real estate, why its values are in flux, and what this might mean for the sector going forward.
In the post-COVID-19 era, many businesses are beginning to question the need for physical office space. This is due to the widespread success of remote working, which has become increasingly popular as a way to reduce overhead costs and facilitate better work/life balance for employees. Many organizations have taken the plunge and gone entirely virtual, while others have embraced a hybrid model of remote and in-person workdays.
The impact of this shift has been particularly significant in the commercial real estate market. Office sector values have been declining throughout the past year, as companies downsize their office space in an effort to save money. This is especially true in urban areas, where flexible office solutions are more accessible and business owners are more likely to take advantage of those options.
At the same time, offices have also seen a decrease in utilization. With more employees working remotely, shared office spaces are going largely unused, resulting in significant financial losses for landlords. This has prompted many companies to look for alternative solutions such as co-working spaces and serviced offices, which offer shorter-term leases and more flexibility.
In addition to these changes in utilization, there has been a shift in the type of office space that businesses are seeking. Rather than traditional brick-and-mortar offices, companies are increasingly interested in these new flexible solutions, which allow for more adaptive workspaces and the ability to scale up or down as needed. This trend is particularly evident in the tech sector, which is known for its preference for highly adaptable workspaces.
CONCLUSION
The office sector in commercial real estate has been greatly affected by the recent pandemic-induced shift towards remote working. As more businesses adopt virtual models and downsize their office spaces, values in this sector are likely to remain in flux over the coming years. Furthermore, the type of office spaces that businesses are seeking has also shifted, as companies begin to embrace more flexible solutions such as co-working and serviced offices. While the future of the office sector is uncertain, it is clear that companies that are able to adapt to these changing trends will come out on top in the end.
BUT WAIT, THERE'S MORE...
While many state & city markets are still suffering with the changes in the CRE office sector, Florida's commercial real estate office sector is booming. Between summer 2021 and summer 2022, many of the nation's top investors, developers and real estate innovators went on a very aggressive shipping spree in Florida. Some so-called experts predicted this would slow down in 2023. On the contrary, it has opened the door to many more on the fence investors to recognize the value of Florida's booming economy. 2024 looks like it will be just as hot and busy for Florida's commercial real estate property acquisitions. Are you still sitting on the fence? Let's talk about it.
***Tomorrow we will add PART II to this blog, detailing why Florida's CRE office space sector is still a strong bet. Tune in tomorrow. In the meantime, if you own commercial real estate anywhere in the state of Florida, you should be contacting Property Tax Alliance Group - PTAG to come up with the best tax strategies to protect your investment and increase your ROI.
[Once you've taken the leap and become a commercial real estate owner, you have to give the pros at Property Tax Alliance Group - PTAG a call. #PTAGsaves Florida commercial real estate owners/investors on their property tax bill. The goal is to free up much needed capital for future endeavors, repairs or reinvestment. To learn more, contact us at www.TaxFlorida.com or contact me, George L. Rosario directly at 954-644-2322. A huge part of managing your Florida commercial real estate investment cash flow involves having your tax liability evaluated by Florida's best commercial real estate property tax team. The Property Tax Alliance Group (PTAG) is a South Florida-based professional Property Tax Consulting and Advisory firm delivering solutions to local, regional, and national clients since 2004. We offer an impressive portfolio of customizable tax reduction services available to Florida commercial property owners. County appraisers are not in the business of reducing your tax liability. We are! And, we help you accomplish this within the full spectrum of the law. Get in touch with us today if you would like PTAG to ensure your business is not overpaying its fair share of local property taxes and increase cash flow. #PTAGsaves]
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ABOUT THE AUTHOR:
George L. Rosario, #GeorgeTheSpeaker with GC Rosario Group
George L. Rosario is a Brooklyn NY born & raised businessman & entrepreneur turned consultant. He started GC Rosario Group with his lovely wife Claudia. With over 30 years of service to the marketplace in NYC, George has relocated and been graciously adopted by the business community of South Florida. He travels the country helping businesses and organizations thrive in today’s noisy environment. George & Claudia Rosario help companies, businesses, organizations and teams develop the necessary skillset and plan of action to not just survive but thrive in this new world. Their love for commercial real estate made them the ideal partners to help Property Tax Alliance Group help more commercial real estate investors, owners, property managers and developers gain more leverage over their portfolio's property taxes. We will help you meet your ROI and NOI goals. George is always available to meet over coffee and discuss how your commercial real estate portfolio can continue to grow when you use proactive strategies to lower your yearly tax burden. Let's talk about it.
“Every day is a good day when you do what you love and love what you do.” – George L. Rosario
George L. Rosario and Claudia P. Rosario are growing some of America's fastest growing brands, including Florida's best property tax consulting firm, Property Tax Alliance Group. If you own commercial property anywhere in the state of Florida, you know PTAG.