Value-add / Creative office

1) Personally, I think it will remain the norm for the foreseeable future with the exception being law offices and other professional services firms that need isolated working quarters; millenials make up the majority of the workforce and this won't change anytime soon. Employers are trying to create live work play environments where employees don't want to go home and you're seeing innovative amenities in tenant spaces that respond to these needs. 2) Yes it can; CBRE just converted their entire LA office to creative. Many firms are doing thins--look up Deloitte's office in Amsterdam I believe--the whole thing is interactive and assigns each employee a new workstation each day. Tech firms and startups clearly lead the way but again I think with the exception of law firms and some other types of tenants (which others on here may be able to expound on) this will become more and more common. The cities you mentioned above are good but are also among the first movers to new trends in US CRE; I'd add Austin, Denver, Atlanta, Dallas, Boston (essentially most of the major cities) to your list. 3) Office is the most operationally expensive aside from hotels, and TI's/Leasing Commissions make up a huge chunk of change. Your lease durations can range from 5-15 years with the average probably being around 7+. Lease expirations are huge in office as you can potentially lose a big percentage of your NOI in a single year; sometimes this is good if you're in a landlord favorable market and can push rents. Office using employment numbers and population growth will be your big indicators for booming markets. 4) No idea on this; how many years have you been doing MF? Do you not like it anymore? Underwriting MF vs Office in my opinion comes down to using Argus vs. straight excel. Office leases can get hairy (when you get to doing high rises with 20-30 tenants) but modeling out a multifamily deal can also get complex. I've always been a generalist so I can't comment too much on a transition but I'm sure others on here can talk more to that.

The pressure of leasing up a value-add / creative office play is tremendous and far more difficult. It can take a lot longer to lease-up than you think depending on your timing to market of course, and you have the IRR clock ticking and lenders breathing down your neck in the process. The leverage and rates you get on office deals will be less attractive because of the inherent risk involved in office as an asset class.