Rising office vacancy rates mean building owners may soon have to think about expensive redevelopments @WSJ #CMBS wsj.com/articles/home-…
The average office vacancy rate will hit an almost three-decade high of 17% in the U.S. in 2022, according to CBRE estimates. That compares with around 7% in Europe.
Idle offices may end up being converted into other uses where supply is tight, such as warehousing or homes. Logistics vacancy rates in both the U.S. and Europe fell below 4% last year, and house prices soared during the pandemic.
However, valuations would have to fall further to make the conversion costs worthwhile. Many offices need to be torn down and completely rebuilt for the very different requirements of industrial or residential property.
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