Record High Office Vacancy Rates Driven by Remote Work Trends and Economic Uncertainty

Office vacancy rates hit a new record high of 19.8% in Q1 2022, surpassing previous recession-era peaks in 1986 and 1991.

The high vacancy rates are largely driven by remote work reducing the need for office space. Hybrid work models mean less demand for physical offices.

Effective office rents fell 0.04% in Q1 2022, indicating declining demand.

Some companies are doubling down on office space, leading to a "slow bleed" rather than mass vacancy.

It's unclear if office vacancies have peaked this cycle given uncertainty around lease rollovers and interest rates.