Even as companies continue to roll out
RTO mandates, the national office
vacancy rate keeps breaking records. And
experts don't expect them to return to pre-
pandemic levels any time soon—if ever.
But it's worth noting, the best offices are
more immune to high vacancy rates, and
demand for these buildings will remain
high.
"I think your 'Class A' prime offices with the
great amenities and the right locations are
still going to be fine," Ross Leibowitz says.
"Your 'Class A' offices that don't have all
the great amenities and locations are going
to slip. I think we may see an uptick in
demand for real estate in satellite
locations where companies want smaller,
more flexible commitments."
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O F F I C E V A C A N C I E S W I L L R E M A I N H I G H
"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. 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."
—Moody's CRE
Still, we'll likely see minor changes in
vacancy throughout the year as lessors find
solutions to low demand.
"There should be a gradual reduction in
vacancies in 2025," John Vivaldi says.
"Lower rents and high vacancies will lead
more landlords to convert their locations
for other purposes, so some of these
vacant offices will be removed from the
market."
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2025 Workplace Predictions: Prediction #4
