What's up with the Office Market?
Thoughts from Ted Klinck, the CEO of Highwoods Properties
In early December, Wake County Economic Development hosted the first EDGE 7 investor meeting, which featured a presentation by Ted Klinck, CEO of Highwoods Properties.
During a time when the office market is on everyone’s mind, Ted shared a thorough overview of what his team sees as a year of opportunity in 2025. He shared this quote:
“The reports of my death are greatly exaggerated.” - Mark Twain
He shared that the notion that office space is dead/dying is untrue. It's quite the opposite in Raleigh and the Research Triangle region. Here is what Ted had to say:
Construction challenges, such as getting a loan and new requirements on assets and equity, are higher. Anticipate headwinds for the next five to seven years.
Thoughts about suburban offices - they are under demolished due to lack of amenities.
Leasing demand is increasing! We’ve seen robust leasing in the last four quarters, making it the best year since 2014.
Vacancy rates have peaked!
Subleasing has decreased as companies are bringing people back to the office.
The capital market must thaw, and our bankers must start lending.
A comment about economic development - “Raleigh isn’t announcing big companies. But we’re hitting lots of singles. And the singles add up.”
Key Takeaways from Ted:
Despite challenges, the market is stabilizing, and opportunities abound for strategic investors.
“Be greedy when others are fearful”—now is the time to invest in office spaces, mixed-use developments, and industrial properties.
Focus on reinvestment, building quality assets, and supporting growing neighborhoods will drive long-term success in the office market.
Highwoods Properties is a fully integrated office real estate investment trust (REIT) founded and headquartered in Raleigh.
