Quick Takeaways

  • Some office buildings can be repurposed
  • Vacancy rates are predicted to reach near 20% in 2024
  • Office construction will slow down

Source: Empty Office Buildings May Meet the Same Fate as Zombie Shopping Malls (CNN, Dec. 17, 2023)

The COVID-19 pandemic and the resulting work-from-home orders have greatly affected every facet of real estate, and many office buildings are taking on new lives. Both employers and developers have had to get creative, enticing people back to the office with improved safety precautions and luxury amenities.

Office buildings are forecast to have a tough year in 2024—possible loan defaults and increased vacancy rates. Landlords are offering concessions to retain tenants, such as free rent and flexible lease terms. More commercial landlords are adding shared work spaces to their portfolio and new business models are proliferating.

Co-working has also taken on a whole new life post-pandemic. Though many are not eager to share space with strangers, it has also provided dedicated work space in a year (almost two) when our homes became our offices, gyms, and schools. WeWork and four other co-working companies have just signed a contract with the federal government, the first of its kind.

Four years later, the Covid-19 pandemic continues to affect work life in many ways. After many Americans spent some amount of time working completely remotely, 2022 saw a variety of office return schedules. Hybrid work – a combination of designated in-office and remote days – seems to be here to stay, but only time will tell exactly how it will affect the office property market.

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