The recovery of the U.S. office market from the impact of the coronavirus pandemic and recession is going to be a slow process, likely stretching beyond 2024, Cushman and Wakefield predicts in a new report on the future of office space worldwide.
The report predicts that the U.S. office sector will lose about 145 million square feet of office occupancy in 2020 and 2021 as the result of the economy losing a net 1.7 million office jobs.
As of the second quarter of 2020, the office sector has already lost 23.1 million square feet of occupied space nationwide, with negative absorption continuing for at least another 18 months.
All together, a 145 million square feet contraction in occupied space is about 2.7 percent of the entire U.S. office inventory as of the first quarter of 2020, the report notes.
That would mean the current contraction, if it follows the baseline scenario, would be worse than the contraction of the Great Recession of 2.2 percent, or that of the dot-com recession of 2001, which saw a loss of 2.4 percent of occupied office space.
The pandemic is only part of the reason for negative office absorption, according to Cushman and Wakefield.
Even without it, absorption rates were in decline, because businesses were using fewer square feet per employee.
