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Special Report

Office National Report

2Q 2023

Office Users Face Diverging Paths as Needs Vary;
Persisting Hybrid Work Clouds Long-Term View

Fundamentals remain challenged near-term. While health concerns have largely dissipated, ongoing hybrid work practices continue to impact the office sector. As leases end, companies are re-evaluating space commitments. In some cases, this is leading to office closures or consolidations. Asset and location-specific features are major influences on these decisions. National availability rose to 16.8 percent in March 2023, the fifth consecutive quarterly increase, and will likely stay on an upward track for the near future. The property type can be expected to stabilize over time, however, as developers respond to weakening fundamentals by curtailing development. Major office projects have begun to stall amid uncertainty and other proposals could be sidelined, reducing completions in the coming years.

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