COTW: Record Office Vacancy Rates

April 9, 2024COTW: Record Office Vacancy Rates

  • The dramatic rise in office vacancy rates across the U.S. in recent years can largely be attributed to the shift in workplace dynamics post-COVID-19, with a significant number of employees now working in a hybrid model from home. This shift has exposed the oversupply of office spaces built primarily during the development booms of the 1980s and 1990s, deepening the vacancy crisis.
  • Preliminary reports show that office vacancy rates in the first quarter surged to a historic 19.8%—the steepest quarterly rise since early 2021 and exceeding the peak of 19.3%, a figure seen only twice in the past four decades. Prior to the pandemic, the average office vacancy rate hovered around 16.8%.
  • The increasing preference for remote work, coupled with corporate strategies to shrink physical offices in response to anticipated economic downturns, has led to unprecedented levels of unoccupied office space. Additionally, the market for new office constructions has decelerated to its lowest point since 2012, reflecting the diminished demand for such spaces.


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