Turning risk to opportunity: rethinking value creation in aging places and spaces

Although there is no one measurement to calculate near-term stranding risk, building age tends to correlate best with the ability to meet tenant, investor and sustainability requirements along with the rate of occupancy and rent growth. In addition to significant capital needs, building age also contributes to an uneven distribution of capital investment required to keep at-risk buildings viable. Forty-four percent of projected obsolescence is likely to be in the U.S. given higher levels of structural vacancy, along with an additional 34% in Europe, as flight to quality in select segments leads to a smaller but still significant amount of vacant product. This disconnect also exists in New York, Washington DC, Paris, Chicago and London, accounting for $242 to $320 billion of necessary global capital expenditures.