What comes next?
In Summer 2023, McKinsey’s Real Estate Practice published a very interesting report on Empty spaces and hybrid places, highlighting the pandemic’s lasting impact on real estate.
“One way cities could adapt is through mixed-use neighborhoods—that is, neighborhoodsthat are not dominated by a single type of real estate (especially offices) but insteadaccommodate a diverse mix of office, residential, and retail space.” McKinsey Real Estate Practice (July 2023)
Key Take-aways from the report:
- Hybrid work is here to stay, and office attendance is down by 30 percent.
- Up to 7 percent of the people in urban cores left for good.
- Shopping remains depressed, especially in urban cores.
- There will be 13 percent less demand for office space in the median cities throughout the report.
- Business mix and urban structure make a difference at the neighborhood level.
- Hybrid work is here to stay - and office attendance is lower in large firms in the knowledge economy.
- There is a ‘flight to quality’ in office space.
