by Eric Lendrum
The second quarter of 2024 saw the rate of office vacancy in the United States hit a record high total of 20.1 percent, according to Moody’s tracking.
As reported by Axios, the rise in office vacancy in the last several months has been unusual compared to past trends, as such rates usually only rise during economic downturns. Thus, the rate continuing to increase despite the economy remaining relatively stagnant is an indication of consumers’ and business owners’ ongoing negative sentiments about the current state of the economy.
Some have also attempted to blame the high rate of vacancy on the after-effects of the Chinese Coronavirus pandemic, which saw many employers change their employment model from in-person work to remote working, thus eliminating the need for such office space.
Nick Luettke, an associate economist at Moody’s, said that long-term leases are taking a longer time to unwind than previously expected, and that as a result, there’s “just going to be pain over the next coming years.”
The current trends indicate that the rates of vacancy will only climb higher over the next several years, and will most likely peak at the end of 2026. It could get even worse if the economy goes through an even bigger downturn, which is likely due to the stubbornly high rate of inflation.
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Eric Lendrum reports for American Greatness.
Photo “Empty Office” by kate.sade.
