The work from home trend will continue to put pressure on the office real estate market, with peak vacancy of between 22% and 28% in 2026, according to a forecast by Moody’s.
“The discourse around the purported benefits of in-office work, emphasized by some CEOs, has been prominent in the media,” Moody’s says. “Nevertheless, the argument for maintaining or even increasing remote work practices remains compelling for many businesses. If productivity remains stable and costs can be reduced by forgoing physical office spaces, the rationale for mandating in-office attendance diminishes.”
The base model forecast indicates that the impact on office demand from work from home will be around 14% on average across a 63-month period, resulting in vacancy rates that peak in early 2026 at approximately 24% nationally, Moody’s says. The vacancy rate could reach as high as 28% in the highest-case scenario.
Moody’s forecasts that higher vacancy rates will cut revenue for office landlords by between $8 billion and $10 billion by 2026. That could cause property value deterioration in the range of a quarter-trillion dollars.
Related Stories
| Jun 18, 2012
BOKA Powell Wins ‘Deal of the Year’ for One McKinney Plaza Transformation
$6 million renovation converted 1980s-style building into a modern destination in uptown Dallas
| Jun 13, 2012
Is it time to stop building convention centers?
Over the last 20 years, convention space in the United States has increased by 50%; since 2005, 44 new convention spaces have been planned or constructed in this country alone.
| Jun 13, 2012
Steven L. Newman Real Estate Institute to hold energy asset conference for property owners, senior real estate managers
Top-level real estate professionals have been ignored as the industry has pushed to get sustainability measures in place.
| Jun 12, 2012
SAC Federal Credit Union selects LEO A DALY to design corporate headquarters
LEO A DALY also provided site selection, programming and master planning services for the project over the past year.
| Jun 11, 2012
Hill International selected as CM for Porto Arabia Towers in Qatar
The complex is a mixed-use development featuring both residential and commercial properties.
| Jun 8, 2012
Thornton Tomasetti/Fore Solutions provides consulting for renovation at Tufts School of Dental Medicine
Project receives LEED Gold certification.
| Jun 6, 2012
KPF designs tower for Yongsan IBD
The master plan, created by Studio Daniel Libeskind, is a dynamic urban environment containing contributions from 19 different architects practicing in diverse locations around the globe.
| Jun 6, 2012
SOM urges Chicago tenants to partner with landlords to cut energy use
Tenants can exceed building energy challenge targets recently announced by Mayor Emanuel.
| Jun 5, 2012
Walker Parking opens office in Abu Dhabi
Walker has been in Abu Dhabi since May 2011 but in a temporary office suite.
