The “flight to quality” trend has been ensconced in the embattled office sector for much of the post-pandemic era, and it’s showing little sign of slowing in the major markets of Texas. With overall tenant demand depressed in the aftermath of COVID-19, opportunities existed in droves for office users to upgrade their spaces and move into buildings with desirable amenities and vibrant surrounding neighborhoods. In doing so, these companies sought to incentivize their employees to come back to the office. Simultaneously, owners that invested in wellness features and activation programs for their properties sought to gain a leg up on the competition — and make tough conversations with lenders a bit more palatable. Whether or not those initiatives worked as intended undoubtedly varies greatly from company to company and owner to owner. But after multiple years of stagnant occupancy and rent growth, the targeting of seemingly superior buildings and locations has come to represent more than just opportunistic decision-making by tenants. It’s a movement that has created visible delineation among winning and losing submarkets, a strategy that embodies basic financial prudence and perhaps a necessary evil — assuming that office usage is finally starting to rebound in a meaningful …
