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Office Sector Heads for Surplus of 330 Million Square Feet

The office sector is facing an unprecedented imbalance in supply and demand leading to an excess of 330 million square feet of vacant space in the U.S. by the end of the decade. The imbalance is attributable to hybrid and remote work strategies, Cushman & Wakefield says in a new report.  

Demand for office product that can accommodate modern-era tenant preferences and provide a high-quality, strong in-person experience has shifted dramatically higher. Conversely, demand for mediocre, lower-quality, older non-sustainable/ESG-oriented, commodity office product has shifted dramatically lower. 

“The relationship between job growth and office demand has fractured,” said Kevin Thorpe, chief economist and head of global research at Cushman & Wakefield. “While elements of this relationship are likely to resolidify as the impact of remote working strategies on office demand stabilizes, the office sector is nevertheless facing a period of structural change that will pressure operating fundamentals and property income. The net result of these shifting demand dynamics and static supply dynamics is an accelerated divide between the office that works for today’s economy and the office that doesn’t work.” 


Inside The Story

Cushman & Wakefield's Thorpe

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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