Going into 2020, Baton Rouge’s office sector was already soft because of rising vacancy rates from companies either downsizing or moving offices out of state.
With the outbreak of the pandemic, many companies shifted their workforces to work remotely from home, keeping offices nearly empty for months and leaving experts wondering how the sector would adapt to the disruption. Local real estate agents experienced a four-month window last year with zero office calls, according to NAI Latter & Blum’s Ty Gose, who chaired the 2021 Office TRENDS committee, and most of the calls that real estate agents did receive through the year were focused on short-term renewals and downsizing in an effort to stay flexible for the future.
While some employees have since returned to the office, and more will over the coming months, some companies have realized they can downsize their office space without sacrificing productivity, casting uncertainty over the sector’s future and leaving landlords concerned.
Despite the disruption, garden office parks remain the strongest subsector in the market. While Class A occupancies fell a percentage point, Class B occupancies rose from 95% to 99% last year. Estimating that some 20% to 30% of the area’s inventory was up for lease renewal in 2020, the office market segment stood resilient, according to the TRENDS committee.
Read the full story about the office real estate sector from the latest edition of Business Report.