Office National Report

Vacancy on the rise. Office use has structurally changed in the post-pandemic era with hybrid work emerging as the standard practice for many companies. The prevalence of in-person attendance varies by region, industry and company size, but hybrid work models have demonstrated more stickiness than originally expected. A reduction of in-office work hours has complicated companies’ long-term space leasing decisions. As leases end, many firms are choosing to reduce their footprints to better align their space with their actual usage levels. The changing utilization, together with the addition of about 78 million square feet in 2023, is contributing to what will be a fourth consecutive year of vacancy increases. Newer buildings often come online with higher asking rents, which has pushed the national mean asking rent nominally upward over the past three years.