U.S. office buildings are unlikely to regain their peak pre-pandemic values until at least 2040, according to a forecast by Capital Economics. Values are expected to plunge 35% from the peak by the end of 2025 and take 15 years or more to recover as hybrid and remote work reshape real estate markets across the U.S., London-based Capitol Economics reported in an analysis conducted for Bloomberg News .
Economist Kiran Raichura wrote that demolitions and conversions of underperforming assets may partially counteract valuation losses; however, landlords will ultimately bear those costs, making for an arduous road ahead for office owners in America’s commercial real estate sector . Major institutional investors have defaulted on some office buildings due money-losing properties , with $43 billion out of $64 billion in potentially distressed assets attributed solely to offices spaces nationwide , Bloomberg reported .
The outlook is grim but not unexpected given current market conditions; it appears that U.S.-based office pricing won’t return back up until 2040 at earliest – a long wait indeed!
