Office vacancies turn corner, driven by small occupiers: CBRE

Renewal rates are up as moving costs rise and inventory shrinks thanks to a slowdown in new construction, stepped-up demolition and more office conversions, the firm says

U.S. office vacancies showed their first year-over-year decline since the pandemic, according to a report by CBRE. The shift has been driven by a slowdown in new construction and the demolition and conversion of older office space, according to Stefan Weiss, U.S. head of office research for CBRE. 

The vacancy rate of 18.8% in Q3 compares to 19% a year prior — a high that previously hadn’t been touched since 1992 in the wake of the savings and loan crisis, Weiss told CFO Dive. The current healthier vacancy rate, which is one of the latest signs that the office sector has begun to shrug off the effects of remote and hybrid work that have impacted commercial real estate since the pandemic began, Weiss said. 

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RSK: We own several small office buildings, and I know of others that are continuously full. We have a waiting list at one and I am betting others in prime locations do as well. There is a place for all types and sizes of office users.