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U.S. Office Vacancies Reach Record High
An average of 19.6% of office space in major U.S. cities wasn’t leased as of fourth-quarter 2023, reported the Wall Street Journal, citing data from Moody’s Analytics. That’s up from 18.8% a year earlier and is slightly higher than the previous records of 19.3% set in 1986 and 1991 and the highest number since at least 1979, when Moody’s began keeping track.
Although the remote working trend is partly to blame, the WSJ reported that the current vacancy issue traces its roots to the office-market downturn of the ’80s and ’90s, which followed years of overbuilding. “The bulk of the vacant space are buildings that were built in the 1950s, ’60s, ’70s and ’80s,” Mary Ann Tighe, chief executive of the New York Tri-State region at CBRE, told the WSJ.
As in the early ’90s, it is the overbuilt South that is hit hardest. Today, the three major U.S. cities with the country’s highest office-vacancy rates are Houston, Dallas and Austin, according to Moody’s. In 1991, Palm Beach and Fort Lauderdale in Florida and San Antonio held those positions, although today vacancies in West Palm and Fort Lauderdale rank among the lowest.
- ◦Lease
- ◦Development
