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 | Oct 26, 2016
The power of office amenities in the workplace
With a continued focus on providing more with less, companies across all industries are continually driving their workers to increase efficiency and productivity—to get product and services to market faster and cheaper, writes LPA's Karen Thomas.
Office Buildings | Oct 26, 2016
Zaha Hadid Architects’ Dominion Office Building employs a fantastical design for its atrium
The office is located in Moscow’s southern district.
High-rise Construction | Oct 5, 2016
Plans for Hudson Yards skyscraper from Bjarke Ingels have officially been filed
The 65-story tower will be primarily office space and has an estimated development cost of $3.2 billion
Office Buildings | Sep 30, 2016
How to choose the right amenities for your office
No matter how lavish the amenities, they’ll prove ineffective in making any kind of positive impact if they don’t align to a company’s culture and the characteristics that make an organization unique, write Gensler’s Lena Kitson and Kimberly Foster.
High-rise Construction | Sep 23, 2016
A massive redevelopment in Tokyo reunites developer and architect
Mitsui Fudosan and SOM join forces to create OH-1, a mixed-use complex with a prominent public square.
Office Buildings | Sep 22, 2016
‘Floating’ triangular glass building from Foster + Partners breaks ground in Copenhagen
The glass building provides the illusion of floating above a stone plinth.
Office Buildings | Sep 20, 2016
Sterling Bay proposes SOM-designed office tower near Chicago’s newly opened Transit Center at Union Station
The building is one of several projects that are filling this developer’s plate in this city.
Office Buildings | Sep 8, 2016
Taipei’s Lè Architecture, designed by Aedas, is almost complete
The 18-story building is designed to resemble a moss-covered river pebble in Taipei’s Nangang District.
Office Buildings | Sep 2, 2016
Eight-story digital installation added as part of ESI Design’s renovation of Denver’s Wells Fargo Center
The crown jewel of a three-year makeover project, the LED columns bring the building’s lobby to life.
Codes and Standards | Sep 1, 2016
Overuse of air conditioning hurts office productivity
A study found temperatures in the low 70s reduce worker performance.
