Office Building Vacancy Hits All-Time High

By: Anneken Tappe · January 10, 2024 · Reading Time: 2 minutes

Excess Vacancy

Office buildings across the country are emptier than ever. Vacancies hit a record high in the fourth quarter of 2023, according to Moody’s Analytics, surpassing peaks from 1986 and 1991.

This shift comes as companies adapt to the rise of remote and hybrid work.

From Office Park to Ghost Town

Remote and hybrid work are down from their pandemic-era peak. Even so, work culture has changed in America, and that change is stickier. So much so, that it has had a lasting impact on companies’ need for physical locations. In response, some businesses are minimizing their physical presence — or transforming it.

Instead of sprawling business districts and office parks, some companies today favor mixed-use arrangements featuring office buildings, retail areas, entertainment, and other amenities in one shared space.

This shift is similar to the retail industry’s reckoning with the rise of e-commerce. Rather than closing brick-and-mortar locations, brands simply reimagined the in-person shopping experience.

No Surprises

The shift hasn’t been smooth sailing for everyone. Office landlords in particular have predictably taken a hit.

But it could be worse. Historically, sharp increases in vacancies were accompanied by economic downturns, which wasn’t the case here. Instead, the office building exodus was more gradual, and to some extent predicted, while the economy as a whole is chugging along.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

TLS 1.2 Encrypted
Equal Housing Lender