US Office Pricing: No Recovery Until 2040

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 projected to drop 35% from the peak by the end of 2025 and take 15 years or more for recovery as hybrid and remote work reshape real estate markets. Economist Kiran Raichura noted that demolitions and conversions of underperforming assets may partially offset the impact on valuation-based indices, but landlords will ultimately bear those costs – making it an arduous road ahead for office owners. Major institutional investors have defaulted on some office buildings rather than investing in money-losing properties; these investments account for $43 billion of $64 billion in potentially distressed assets, reported Bloomberg News . It is clear that U.S offices will not return to their pre-pandemic pricing levels until at least 2040 due to weakened demand for desk space combined with long term changes in how people work remotely or hybridly