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Moody’s: U.S. Office Vacancies Could Reach New Highs
National office vacancies will exceed historic highs within the next few years, says Moody’s Analytics Real Estate Informative Services (REIS). The firm projects vacancies rising to 19.3% in 2020 before surpassing the 1991 record high of 19.7% to reach 19.9% in 2021 and 20.0% in 2022.
Office is also projected to incur significant distress in effective rents, which Moody’s expects to fall by 10.4% nationally in 2020.
“Many companies continue to push back returning to the office, with some already planning to telecommute until 2021,” said Victor Calanog, head of CRE economics at Moody’s Analytics. “Whether the increased availability of remote working infrastructure will have long-term effects on office demand remains to be seen.”
Retail is expected to fare even worse, with effective rents likely to fall by 11.1% this year given wide-scale store closures and rising competition from e-commerce. By contrast, industrial and multifamily properties will likely fare better.
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- ◦Economy
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