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
Building Team Awards | May 26, 2016
Cimpress office complex built during historically brutal Massachusetts winter
Lean construction techniques were used to build 275 Wyman Street during a winter that brought more than 100 inches of snow to suburban Boston.
Building Technology | May 24, 2016
Tech is the new office perk, says a new survey of American workers
But most employees still see their companies falling on the dull side of the cutting edge.
High-rise Construction | May 17, 2016
Foster + Partners-designed towers approved as part of massive neighborhood redevelopment in San Francisco
One of Oceanwide Center’s buildings will be the city’s second tallest.
Architects | May 16, 2016
3 strategies to creating environments that promote workplace engagement
VOA's Pablo Quintana writes that the industry is looking for ways to increase engagement through a mix of spaces suited to employees' desire for both privacy and connection.
Office Buildings | May 9, 2016
Can you make a new building as cool as a warehouse?
CannonDesign's Robert Benson insists that the industry needs to start looking at traditional office spaces differently.
Building Tech | Apr 13, 2016
The Hyperchair gives employees access to their own personal set of climate controls
Not only can the Hyperchair reduce heating and cooling costs and maximize employee comfort, but it can help a company become more environmentally friendly, as well.
Architects | Mar 20, 2016
Ars Gratia Artis: A North Carolina architect emphasizes the value of art in its designs
Turan Duda says clients are receptive, but the art must still be integral to the building’s overall vision.
Office Buildings | Mar 16, 2016
Google releases new plans and renderings of its Mountain View campus
The original canopy design scheme is still in place, but the plans now call for it to be opaque.
Office Buildings | Mar 10, 2016
Expedia unveils design for Seattle waterfront campus
Transparency and outdoor areas will give the complex a Pacific Northwest vibe.
Office Buildings | Mar 9, 2016
CBRE: Workplace wellness on the rise
As insurance premiums and deductibles continue to rise, both employees and employers are evaluating options to improve their wellbeing, writes CBRE Healthcare Managing Director Craig Beam.