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
Plumbing | Mar 13, 2020
Pioneer Industries launches new website
Pioneer Industries launches new website
Architects | Mar 9, 2020
New York's façade inspection program gets an overhaul following a death from falling terra cotta
January 14, 2020, kicked off big changes to the NYC Local Law 11 Façade Inspection and Safety Program (FISP) for Cycle 9.
Office Buildings | Mar 5, 2020
SOM design’s Disney’s New York HQ
The HQ is being built in the Hudson Square neighborhood.
Office Buildings | Mar 3, 2020
REI’s new headquarters is all about the outdoors
NBBJ designed the project.
Adaptive Reuse | Feb 25, 2020
Hastings Architecture creates its new HQ from a former Nashville Public Library building
The building was originally constructed in 1965.
Office Buildings | Feb 13, 2020
CareerBuilder’s Chicago HQ undergoes renovation
Perkins and Will designed the project.
Office Buildings | Feb 11, 2020
Want your organization to be more creative? Embrace these 4 workplace strategies
Creativity is the secret sauce in the success of every business.
Office Buildings | Feb 11, 2020
Forget Class A: The opportunity is with Class B and C office properties
There’s money to be made in rehabbing Class B and Class C office buildings, according to a new ULI report.
Office Buildings | Feb 3, 2020
Balancing the work-life balance
For companies experiencing rapid growth, work-life balance can be a challenge to maintain, yet it remains a vital aspect of a healthy work environment.
Sponsored | HVAC | Feb 3, 2020
Reliable Building Systems Increase Net Operating Income by Retaining Tenants
Tenants increasingly expect a well-crafted property that feels unique, authentic, and comfortable—with technologically advanced systems and spaces that optimize performance and encourage collaboration and engagement. The following guidance will help owners and property managers keep tenants happy.