Ever since the COVID-19 pandemic's waning days, employers and facility managers have been trying to entice staff to return to the office. However, some of these efforts have been fruitless, as hybrid and remote work continues to become more commonplace.
In a report by Moody Analytics, it found that the office sector set a record vacancy rate of 20.1 percent in the second quarter of 2024, breaking the 20 percent barrier for the first time ever.
Q2’s rate is up from 19.8 percent from Q1, representing the third consecutive record-breaking quarter since 1986 and 1991 where vacancy was at 19.3 percent.
The vacancy rate is being helped by an economy with solid employment numbers as unemployment sits at four percent. Still, the GDP growth is near pre-pandemic levels.
There is a different root cause for the current tumult in the sector than prior peaks, according to the report. Rather than general economic uncertainty, there is a more permanent change in how office spaces are being used which is influenced by the shift to remote and hybrid work since the beginning of the COVID-19 pandemic.
Jeff Wardon, Jr. is the assistant editor for the facilities market.
