U.S. Offices Hit New Vacancy Record
Moody's Analytics found an uptick in vacant office space in 4Q 2023 due to shifting work habits, overbuilding and lingering effects of the pandemic, the Wall Street Journal reported.
Moody's Analytics reports about 19.6% of office space in major U.S. cities went unleased in the fourth quarter of 2023, up from 18.8% a year prior and more than the 19.3% vacancy rate in 1986 and 1991.
Overbuilding, shifting work habits and the impact of the pandemic have led offices to be at their emptiest in 40 years. The empty offices are due, in part, to the office-market downturn of the '80s and '90s when years of overbuilding and easy lending led to too many spaces available today.
Companies also have opted for open floors and cubicles, rather than spacious private offices, to reduce expenses. These companies need less space per employee, and the pandemic and shifts in working conditions sped up the demand for smaller office spaces.
Source: Wall Street Journal (01/08/24) Putzier, Konrad
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