Marcus & Millichap Navigates California’s Troubled Office Market

Challenges in the commercial real estate office sector continue, with stubbornly high vacancies persisting as remote and hybrid work schedules continue to stifle demand. Owners of struggling properties are feeling the burn, in the form of loss of cash flow and, if faced with loan maturities, an inhospitable financing climate. Investors are not the only players in the office market that are suffering from the bleak market conditions. Brokerage firms are victims of the office sector’s decline as well, and those firms with a strong presence in the most depressed markets are in a special kind of bind. National real estate investment firm Marcus & Millichap maintains offices in 36 states across the country but has a high geographic concentration in California. The firm, which is unique in the commercial real estate services world as its primary business line is representing clients in investments sales transactions, saw its activity in California outpace that in the other 35 states where it has a presence, accounting for 23 percent of its total revenue. 

California is home to two of the country’s leading office markets, San Francisco and Los Angeles, where the central business districts are struggling with unique issues in addition to those that plague most of the big-city office markets. As with most top metros in the United States, the Los Angeles and San Francisco office sectors continue to struggle with low occupancies largely due to the remote and hybrid work schedules that have become the new normal in the office-using workplace.

Read more at Propmodo.

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