Office space vacancies hit a record high

Offices are emptier than they’ve ever been. More office space is sitting empty in the US than at any point since it began to be tracked over 40 years ago, according to a new report from Moody’s Analytics.

More office space is currently sitting empty in the United States than at any point since 1979, the year Moody’s Analytics began tracking the trend. The surplus of office space is mainly due to the massive shift in how employees show up for their jobs following the Covid-19 pandemic. For many, office life has been replaced by hybrid work from the comfort of their home. This massive cultural change also exacerbated an overabundance of supply that had been built in the 1980s and 1990s, according to the report, released Monday. The national office vacancy rate rose to a record-breaking 19.6% in the fourth quarter of 2023, Moody’s Analytics said. That’s the largest quarterly increase since the first quarter of 2021, and larger than the 19.3% level reached twice in 40 years. The average pre-pandemic office vacancy rate was around 16.8%. This is bad news for landlords and developers eager to fill their buildings, and also for the restaurants, retailers and other small businesses surrounding offices.