Long-term relief for the U.S. office market will come in the form of constrained new supply, according to CBRE’s Econometric Advisors division. The forecast predicts construction completions slowing to a quarterly average of four million square feet from mid-2024 through 2028, roughly 37% lower than the historical quarterly average.
Manish Kashyap, CBRE global president of advisory & transaction services commented: “The impending construction slowdown in the office sector is similar to what we saw with retail over past decade – where after Great Financial Crisis retail construction tapered off and vacancies gradually declined to a record low 4.8% this year’s first quarter; resulting in rising rents.” He added that it may be an indication as what is expected for future office market trends too.
CBRE projects U.S office vacancy will peak between 19%-21%, late 2024 before gradually declining back down towards 16% by 2028
