Energy-efficient Offices

Energy-efficient Offices Among Potential Investment Opportunities In 2024

USA – JPMorgan Chase & Co forecasted that while the overall office vacancy rate in the country is close to the historic peak, there are still investment opportunities in some types of office properties as interest rates stabilise, according to the investment bank’s 2024 commercial real estate outlook that was published last week.

Citing data from Moody’s Analytics, JPMorgan Chase said that overall vacancy level in the United States reached 19.2 percent at the end of the third quarter. That’s higher than the rate recorded in the preceding quarter and is nearing the historic peak of 19.3 percent.

“Despite these headwinds for office, it’s important to remember that while there is and will continue to be obsolete office, the office is not obsolete,” explained Ermengarde Jabir, Senior Economist at Moody’s Analytics.

Excellent quality office space continues to see robust demand, with more occupants now capable of affording such workspace. However, some less-desirable office properties, namely Grade B and C offices, could face obsolescence. As such, there could be opportunities to transform CBD office space into data centres or apartments, she noted.

Moreover, the likelihood of further interest rate hikes by the US Federal Reserve has fallen recently, with many expecting one or more rate cuts next year. Also, while there are obstacles ahead, commercial property investors could find several opportunities in 2024.

Among them are energy-efficient office buildings, which become more sought-after as electricity costs rises. For instance, by installing solar power systems and water recycling equipment, office landlords can save greatly money on utilities and attract green-conscious occupants.

Furthermore, city officials often check how much power a property will use before granting a building permit, hence energy-saving feature may be able to speed up the development process.

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