**Office Space Removal Projected to Outpace New Construction in 2025**
For the first time in at least 25 years, the reduction of office space—through demolitions and conversions—is set to surpass new construction in 2025. According to CBRE data reported by CNBC’s Diane Olick, a total of 23.3 million square feet of office space is expected to be demolished or converted to alternative uses across the 58 largest U.S. markets by the end of the year. In contrast, new office developments in these markets will amount to just 12.7 million square feet.
“This net reduction – albeit slight – of office space across major markets likely will contribute to lowering the vacancy rate in the quarters ahead, which would benefit building owners,” said Mike Watts, President of Investor Leasing for CBRE Americas.
Looking ahead, developers are preparing an additional 85 million square feet of office space for conversion over the next several years. Since 2016, office-to-residential conversions have resulted in approximately 33,000 new apartments and condominiums, with another 43,500 units currently in the pipeline from ongoing projects.
This shift highlights a significant transformation in the commercial real estate landscape, driven by changing work habits, evolving market demand, and an oversupply of underutilized office space.
