When Will the Office Market Recover?

The national office vacancy rate is at its highest level in over twenty years, reaching 13.5% as of Q2 2023. The pandemic’s early part saw a rapid increase, reaching over four percentage points in 18 months. The office market typically recovers in less than three years following economic shocks, with previous cycles involving the dot-com bust, global financial crisis, and energy price collapse. 

However, the current cycle has been disrupted by an unprecedented event, pushing vacancy to new highs. If peak vacancy occurs in the next few quarters, it could take at least five years before the market returns to its starting point of 6.5%. Despite the recovery, it will likely take at least three years before vacancy drops below 10% and within the 6-10% vacancy rate range.

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