Office space is adapting to America’s new WFH reality

Sarah McLachlan just found her next gig—performing background vocals over a heartstring-tugging commercial about abandoned water coolers.

More office space is being removed than added this year, shrinking America’s overall office footprint for the first time in 25+ years, according to new data from CBRE Group, the world's largest commercial real-estate services firm.

• Across the largest 58 US markets, 23.3 million square feet of office space is slated for demolition or conversion to other uses by the end of this year….
• …while developers are projected to construct just 12.7 million square feet of office space.

There’s a remote rationale: The trend stems from an ongoing shift in office attendance driven by the pandemic. Office vacancies soared to a record high ~20% in 2020 as companies and employees embraced remote-work culture, and remain around that level today despite recent corporate pushes to return to the office.

From WFH, to home at work: Old office spaces were converted to a record-high 55,300 new apartments last year, up from 12,100 such conversions in 2021 (+357%). The idea behind the increasingly popular concept is simple: knocking out two birds—record-high office vacancies and America’s current residential housing shortage—with one building-sized stone.

Looking ahead…Developers have another 85 million square feet of office space being readied for conversion to apartments and other uses in the next few years, CNBC reports.