"Office vacancy remains extremely elevated, but supply and demand are moving back into balance, and the market is showing signs of health. "The word that we're using is stabilization," said Julie Whelan, CBRE's global head of occupier research. "We really do feel like we have stabilized as a market, and now we can begin to lay the road to recovery." CBRE, the world's largest commercial real estate services and investment firm, shared new analysis showing a growing pipeline of office conversions. These are old office buildings finding new life as condos, hotels, industrial space and more. Sixty-six office conversions are slated for completion this year after averaging around 40 a year before the pandemic."
"Factors such as building age, floor-plate size and location all limit the viable supply of buildings for conversion. But there's now 99 million square feet of office space, or 2.4% of total U.S. supply, undergoing or planned for conversion. That's up from 81 million square feet as of the second quarter. The national office vacancy rate is nearly 19%, compared to 12% before the pandemic."
Office vacancy is markedly elevated at nearly 19%, up from about 12% before the pandemic, while supply and demand are trending back toward balance. CBRE reports stabilization in the market and a growing pipeline of conversions that repurpose old office buildings into condos, hotels, industrial space and other uses. There are 99 million square feet, or 2.4% of U.S. office supply, undergoing or planned for conversion, with 66 conversions slated this year. New office construction has slowed dramatically and demand shows six consecutive quarters of positive net absorption, indicating improved market health.
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