2023 Office Demand
The US Office Market’s Response to the Pandemic is Vastly Different Compared to Past Economic Periods of Volatility
Office Demand Shrinks as Jobs Historically Considered Office-Occupying Grow
Past events can typically provide insight into the economic events we are currently facing. The COVID-19 Pandemic was first announced in March 2020, followed by a brief period of steep job losses, however, the losses quickly changed direction and passed pre-pandemic levels in 16 months. In comparison, the Dot-Com Bust (2000 – 2001) and the Global Financial Crisis (2007 – 2008) required 57 months and 73 months, respectively, to recover the office jobs lost during each of the recessions.
Office Market Reaction To Volatility
The office market responded to the Dot-Com Bust in similar ways to the Global Financial Crisis. After a period of job loss and economic volatility, net absorption and vacancy were negatively affected before rebounding to pre-recessionary levels. The amount of time needed to recover varied, but the office market eventually trended higher.
There has been a fundamental shift following the COVID-19 pandemic in the office market that has affected the recovery compared to the previous two recessions of this century. The reasons are varied and, in some ways, nuanced, but the shift is not translating to increased office demand as historically identified office-occupying jobs recover. The shift has to do with how, when, and where we work.
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