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
Laboratories | Aug 30, 2021
Science in the sky: Designing high-rise research labs
Recognizing the inherent socioeconomic and environmental benefits of high-density design, research corporations have boldly embraced high-rise research labs.
Giants 400 | Aug 27, 2021
2021 Office Sector Giants: Top architecture, engineering, and construction firms in the U.S. office building sector
Gensler, Jacobs, Turner Construction, and STO Building Group head BD+C's rankings of the nation's largest office building sector architecture, engineering, and construction firms, as reported in the 2021 Giants 400 Report.a
Resiliency | Aug 19, 2021
White paper outlines cost-effective flood protection approaches for building owners
A new white paper from Walter P Moore offers an in-depth review of the flood protection process and proven approaches.
Office Buildings | Aug 4, 2021
‘Lighthouse’ office tower will be new headquarters for A2A in Milan
The tower, dubbed Torre Faro, reimagines the company’s office spaces to adapt to people’s ever-changing needs at work.
Office Buildings | Aug 3, 2021
‘Lighthouse’ office tower will be new Headquarters for A2A in Milan
Antonio Citterio Patricia Viel designed the project.
Office Buildings | Jul 27, 2021
Verizon Media’s new office and broadcast production studio
Perkins+Will and Kostow Greenwood Architects designed the project.
Daylighting Designs | Jul 9, 2021
New daylighting diffusers come in three shape options
Solatube introduces its newest technology innovation to its commercial product line, the OptiView Shaping Diffusers.
Great Solutions | Jul 9, 2021
MojoDesk creates a new solution for managing open office distractions
The MojoDome allows for a private work space while also maintaining a collaborative environment.
Resiliency | Jun 24, 2021
Oceanographer John Englander talks resiliency and buildings [new on HorizonTV]
New on HorizonTV, oceanographer John Englander discusses his latest book, which warns that, regardless of resilience efforts, sea levels will rise by meters in the coming decades. Adaptation, he says, is the key to future building design and construction.
Office Buildings | Jun 24, 2021
Springdale Green office campus granted approval in East Austin
Gensler is designing the project in collaboration with landscape architect dwg.