Remote work remains a popular choice among many U.S. employees, leading to vacant office spaces as traditional commuting to a physical office becomes less common.
Moody’s has highlighted the uncertainty looming over the office sector as real estate leaders explore converting unused office space into residential properties in various parts of the country. The firm’s data indicates that employees still required to work in an office are likely to spend two fewer days on-site on average.
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CBRE reports a significant rise in office-conversion projects, with nearly 70 million square feet of office space, representing around 1.7% of the total U.S. supply, being repurposed for residential or alternative uses. The firm noted an increase from 60 million square feet in the third quarter of last year to the first quarter of this year. This equates to about 1.4% of the total U.S. supply.
CBRE expects around 120 conversion projects to be completed in the U.S. this year, with a third of them creating multifamily spaces.
Washington, D.C., has set forth a five-year economic plan to attract more residents back to the city and neighborhoods, as mentioned by Mayor Muriel Bowser in March. The city aims to add 15,000 new residents to the downtown area through “office-to-housing conversions.”
