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
Office Buildings | Jun 10, 2021
The future of the workplace is social clubs
Office design experts from NELSON Worldwide propose a new concept for the workplace, one that resembles the social clubs of the past.
Office Buildings | Jun 8, 2021
RMJM Milano wins competition to design Sanko Headquarters in Istanbul, Turkey
The project was selected for its sustainable and innovative features.
Office Buildings | Jun 3, 2021
What's next for workplace design?
Balancing personal space and the need for collaboration.
Digital Twin | May 24, 2021
Digital twin’s value propositions for the built environment, explained
Ernst & Young’s white paper makes its cases for the technology’s myriad benefits.
Office Buildings | May 18, 2021
“The Beam” will be Arizona’s first CLT project
RSP Architects designed the building.
Wood | May 14, 2021
What's next for mass timber design?
An architect who has worked on some of the nation's largest and most significant mass timber construction projects shares his thoughts on the latest design trends and innovations in mass timber.
Office Buildings | Apr 28, 2021
The Salvation Army’s National Headquarters renovation completes
HGA designed the project.
Steel Buildings | Apr 17, 2021
Speed Core wall system is used for the second time in office building in San Jose
The construction method is expected to knock off three months from the project’s schedule.
Office Buildings | Apr 15, 2021
JetBrains St. Petersburg campus to include large, vertically stepped indoor atrium
UNStudio is designing the project.
Office Buildings | Apr 12, 2021
A Fort Myers, Fla., developer finds growth in an office sector that, post COVID, might be catching its second wind
Seagate Development Group has several office projects near completion.
