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
| Oct 2, 2013
Corporate HQ in 10 months made possible with BIM coordination
An integrated Building Team uses BIM/VDC to convert a 1940s-era industrial building into a flashy new headquarters for Hillshire Brands in a matter of months.
| Oct 1, 2013
13 structural steel buildings that dazzle
The Barclays Center arena in Brooklyn and the NASCAR Hall of Fame in Charlotte, N.C., are among projects named 2013 IDEAS2 winners by the American Institute of Steel Construction.
| Sep 24, 2013
8 grand green roofs (and walls)
A dramatic interior green wall at Drexel University and a massive, 4.4-acre vegetated roof at the Kauffman Performing Arts Center in Kansas City are among the projects honored in the 2013 Green Roof and Wall Awards of Excellence.
| Sep 19, 2013
What we can learn from the world’s greenest buildings
Renowned green building author, Jerry Yudelson, offers five valuable lessons for designers, contractors, and building owners, based on a study of 55 high-performance projects from around the world.
| Sep 19, 2013
6 emerging energy-management glazing technologies
Phase-change materials, electrochromic glass, and building-integrated PVs are among the breakthrough glazing technologies that are taking energy performance to a new level.
| Sep 19, 2013
Roof renovation tips: Making the choice between overlayment and tear-off
When embarking upon a roofing renovation project, one of the first decisions for the Building Team is whether to tear off and replace the existing roof or to overlay the new roof right on top of the old one. Roofing experts offer guidance on making this assessment.
| Sep 17, 2013
World's first 'invisible' tower planned in South Korea
The 1,476-foot-tall structure will showcase Korean cloaking technology that utilizes an LED façade fitted with optical cameras that will display the landscape directly behind the building, thus making it invisible.
| Sep 16, 2013
Study analyzes effectiveness of reflective ceilings
Engineers at Brinjac quantify the illuminance and energy consumption levels achieved by increasing the ceiling’s light reflectance.
Smart Buildings | Sep 13, 2013
Chicago latest U.S. city to mandate building energy benchmarking
The Windy City is the latest U.S. city to enact legislation that mandates building energy benchmarking and disclosure for owners of large commercial and residential buildings.
| Sep 13, 2013
Chicago latest U.S. city to mandate building energy benchmarking
The Windy City is the latest U.S. city to enact legislation that mandates building energy benchmarking and disclosure for owners of large commercial and residential buildings.
