Apr 13, 2023 - Economy

U.S. office vacancy rate hits all-time high: "Hybrid" work takes toll on landlords

Data: CoStar Group; Chart: Axios Visuals

The U.S. office vacancy rate is at an all-time high as commercial real estate reels from remote-work arrangements.

By the numbers: 12.9% of office space is vacant, marking the sixth straight quarter the rate has increased and up from a post-financial-crisis low of 9.4% in the second quarter of 2019, CoStar Group reports.

Zoom in: Lessees are reducing office space as their deals come up for renewal.

  • "Today’s hybrid work arrangements mean that the same office can support more workers," CoStar reported.

Worth noting: The office space "availability" rate — which measures vacant offices plus currently leased space that isn't being renewed or has been listed for subleasing — is also at an all-time high of 16.4%, CoStar reported.

Quick take: Office landlords should be concerned.

Editor’s note: The headline on this story was corrected to reflect that the U.S. office vacancy rate hit an all-time high, not an all-time low.

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