How Many U.S. Offices Are Empty?

In June 2024, 34 million out of 154 million U.S. workers aged 16 and older were engaged in remote work, roughly half of whom had a telework quota of 100 percent as per U.S. Census Bureau data. The increasing acceptance of hybrid or fully remote work in a variety of industries coupled with many companies applying cost-cutting measures after pandemic growth spurts has led to a jump in vacant office spaces in the United States. Preliminary data from Moody's commercial real estate market analysis for the second quarter of 2024 shows the share of empty offices has hit a historic high of 20.1 percent.

As the Statista Chart illustrates, this marks a 3.2 percentage point increase compared to the last quarter before the outbreak of the coronavirus pandemic and an increase of almost five percentage points compared to the second quarter of 2018. The previous highs, according to Moody's analysts commenting on the data in the accompanying press release, were at 19.3 percent in 1986 and 1991. This is also reflected in the change in effective rent, which was flat in one and decreased in three of the past four quarters.

The role of big tech companies in this development is evident when drilling down to the changes in specific metro areas. For example, San Francisco exhibited a vacancy percentage increase of 5.4 points and effective rents shrinking by 4.7 percent over the past twelve months. The Raleigh-Durham metro, also known as the Research Triangle due to its three elite universities and large concentration of tech and life science companies, experienced an office vacancy rate increase of 4.7 percent between the second quarters of 2023 and 2024.

Other sources observing the office real estate market show differing numbers, although they portray a similar trend. For example, the U.S. Office Market Outlook Report by Colliers registered a "post-COVID high" for the first quarter of 2024 with a vacancy rate of 17.5 percent, up 5.4 percentage points from the first quarter of 2018 and six percentage points compared to Q1 of 2020.