“Return to Office” Could Change the Housing Market, But Not How You’d Think

On The Market

BiggerPockets

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4.8 • 820 Ratings

🗓️ 9 December 2024

⏱️ 31 minutes

🔗️ Recording | iTunes | RSS

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Summary

“Return to office” mandates from the tech and finance industries are coming rapidly. But they’re not just going back to the downtown areas. Return to office (RTO) calls could cause a surprisingly beneficial boost to suburban areas, even as employees are forced back into the office. This has enormous effects on landlords and real estate investors, as the hottest place to own a home might actually be somewhere outside of the city center. Matt Reidy, Director of CRE Economics at Moody’s Analytics, joined us to give a full update. Matt talks about the potential office comeback that could be taking place and the one type of office investment that is outperforming the rest. However, office vacancies are still at an all-time high, and companies are starting to get creative. Could a move into the suburbs help entice employees by keeping commute times minimal? This could be great news for residential investors outside the cities, as “live, work, play” environments could become a hot commodity. In This Episode We Cover Why more companies are looking for suburban offices to win back employees The revival of downtowns and why they’re growing, even with high office vacancy One type of office investment that’s outperforming the competition significantly Rent price growth predictions for 2025 and 2026 Whether office work is here to stay or the “hybrid” model will become the new norm And So Much More! Links from the Show Join the Future of Real Estate Investing with Fundrise Join BiggerPockets for FREE Find an Investor-Friendly Agent in Your Area Dave's BiggerPockets Profile Good News For Investors—Commercial Real Estate is Finally Catching a Break Read More from Matt Grab Dave’s New Book, “Start with Strategy” Jump to topic: (00:00) Intro (01:30) The Return to Office (03:20) An Office Comeback? (07:12) Offices Move to Suburbs (11:02) Are Downtowns Declining? (17:37) Suburban Demand Grows (21:33) Good News for Investors Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-276 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Over the last couple months, we've seen a lot of major employers call employees back to the office full-time.
0:06.0	But the data also tells us that employees are reluctant to return, and there are a lot of hybrid situations developing as well.
0:13.0	What does this mean for the future of work, and how does this translate to demand for housing and for apartments in the areas that there are a lot of offices.
0:23.4	Today's expert shares his insights.
0:30.4	Hey friends, welcome to On the Market, the Real Estate News and Economic shows for investors and
0:35.6	real estate professionals like you. Today, I'm here with Matt Reedy, a for investors and real estate professionals like you.
0:38.3	Today I'm here with Matt Reedy, a director of commercial real estate economics with Moody's
0:43.3	analytics.
0:44.3	Matt's research has led him to an insight around a specific type of office property that is still
0:50.3	performing really well.
0:52.3	And I'm also super excited to talk to Matt about how the activity
0:56.3	in the office sector is translating to demand for residential properties. And I'm not just talking
1:02.7	about residential multifamily and what's going on there. I'm just talking about how this is
1:07.0	changing where people want to live for generations, people wanted to live close to where
1:12.3	they were working. The pandemic upended all of that. And the return to office trends have
1:17.8	implications for whether the shift to the suburbs is going to continue or we'll start to see
1:23.2	more demand back in downtown areas. We'll get into that and a lot more in my conversation with
1:28.8	Matt. So let's bring them on.
1:35.4	Matt, welcome to On the Market. Thanks for being here. Thanks, Dave. Happy to be here.
1:39.5	I'm excited to talk to you about this return to office situation going on because we've been
1:43.9	hearing about this for years, you going on because we've been hearing about
1:44.5	this for years, you know, ever since the pandemic started to wind down, you know, two years ago,
	...

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