Despite increased return-to-office (RTO) mandates by several companies, office vacancies soared to 20.4% in the top 50 metro areas in 2024, per Moody’s. Hybrid and remote work setups significantly reduced demand for traditional office spaces.
Efforts to address the vacancies include converting offices into residential properties, which can be costly and complex, and demolishing outdated, cubicle-style buildings. CoStar data shows demolitions have steadily risen since 2022.
Meanwhile, modern office buildings near transport hubs with coworking spaces, fitness centers, and other amenities remain in high demand.
Some firms struggle with space shortages after their RTO mandates. AT&T employees report insufficient desks and parking, while Amazon has faced similar issues. Moody’s expects vacancy rates to peak within 9–15 months as new construction slows.