National CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
U.S. Office Vacancies Hit New Record High in Q4 2024
The national office vacancy rate hit a new record at 20.4% in the fourth quarter of 2024, with average effective rents increasing by 0.1%, Moody’s CRE said in its Q4 2024 Preliminary Trend Announcement. The sector suffered a total of 80 basis points of vacancy increase last year, with 30 bps registered in Q4 alone.
“Five years since the adoption of the widespread hybrid and remote working models, a new regime is forming which has led to a permanent reduction in office demand,” wrote Moody’s CRE analysts Thomas LaSalvia, Lu Chen, Nick Luettke, David Caputo and Mike Pellegrini. “More flexible or shorter office leases meant pre-pandemic rollover has now fused with early-pandemic lease rollover throughout 2024, driving more volatilities in future office performance.”
On the brighter side, Moody’s CRE noted that “the emerging trend of popular in-person working days and stabilizing return-to-office rate suggest firms may only be able to reduce their footprint to a certain extent before moving toward a new equilibrium.” Its end-of-year outlooks for the apartment, retail and industrial sectors were more upbeat.
- ◦Lease
