Report Shows US Office Space Could Depreciate Billions By 2030
Aug. 1, 2023, AUSTIN, TX – Thanks to the explosion of the work-from-home movement, tighter monetary policy, and population emigration away from urban markets, office space sectors in key US cities are predicted to depreciate by $800 billion in value by 2030.
The statistic, as covered by MyEListing.com in their latest commercial real estate news roundup, complements another important sector metric: Office space attendance in the US has dropped to 30% below pre-pandemic norms.
“The work-from-home movement, an already highly sought-after idea among employees before the onset of the virus, exploded in notoriety, forcing employers to make some tough decisions about their balance sheet expenses,” according to the report.
“The McKinsey Global Institute shares much of the same pessimism around the office space sector,” it says, “predicting that key cities in the nation will see the value of their office spaces depreciate by nearly $800 billion this decade.”
Retail store traffic is also taking a hit as employees, no longer required to be in the office all week, seek a “corporate nomad” lifestyle.
“Because many are no longer tied to city centers,” says the report, “shopping habits have also shifted: McKinsey states that retail store foot traffic in major metropolitan areas ‘remains 10% to 20% below pre-pandemic levels.’”
According to the report, the solution is the inevitable adaption and conversion of vacant office and retail spaces into mixed-use developments and residential lodging. “Property owners in both retail and office space will be forced to adapt sooner or later,” says the report.
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