U.S. office vacancy hit 21% in Q1 across 79 markets, up from 17% in 2020, according to Moody’s and reported by Axios. The increase reflects a lasting drop in demand for office space.
Hybrid work keeps offices underused
Workers now spend about a quarter of their time outside the office, versus 7% pre-pandemic. Even with return-to-office efforts, hybrid schedules are keeping usage low.
Firms are reducing square footage while moving into higher-end Class A buildings, prioritizing quality over size and designing for collaboration instead of desks.
Market slow to adjust
Long leases—often 5 to 10 years—mean companies are cutting space gradually, keeping vacancy elevated.
Offices are shifting toward locations near housing, with more amenities and flexible layouts. Their role is changing from a default workplace to a tool for attracting talent.
