As hybrid work becomes the new norm, office demand will continue to be limited in 2024 and national vacancy rates will rise slightly. Yet a thinning construction pipeline and an increasing demand for high-quality spaces will continue to support prime buildings to outperform, according to CBRE’s 2024 Office/Occupier outlook.
“The construction pipeline has thinned to its lowest point in a decade,” noted Jessica Morin, director, U.S. office research, CBRE, during CBRE’s U.S. Real Estate Market Outlook 2024 webinar. “It’s just about half of its prepandemic level.”
By the end of 2024, CBRE projects that demand for office buildings constructed after 2010 will begin to outpace new supply.
With office occupiers becoming more certain of the state of their work culture in the post-pandemic work environment, they will better understand what sort of office space they need for their company, which will enable them to make long-term leasing decisions.
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