Research Briefing | Apr 27, 2023

How the WFH movement is changing US office values

We expect the structural shift to working from home to continue to negatively impact the US office sector over the long term. Our capital value forecast for all US offices by the end of the decade is 17% below 2021 values.

What you will learn:

  • In recent months, the adoption of WFH has settled to around 30% of paid full days. But the lagging effect of leases and over-supply will drag on market performance for some time. With 30% of employees working from home and office tenants focusing on right-sizing their space rather than expanding, we think office occupancy rates are unlikely to rebound strongly this year.
  • Also, headwinds from weaker occupancy rates, coupled with monetary tightening and the weaker economy in 2023 will cause certain office markets to struggle more in the near-term. Most affected are Chicago, New York, and San Francisco which have occupancy hovering close to recent lows. Atlanta, Dallas, and Houston are relative winners as they are in a better position to weather downside risks in 2023.
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