U.S. Capital Markets Glide Path to Clearer Skies

Loan maturities a particular challenge for office …as the sector faces both cyclical and structural factors reducing demand formation

U.S. Office Fundamentals: Record Vacancy Since Pandemic

Office Obsolescence

6,000

Overall Net Absorption (MSF)

Vacancy Rate (RHS)

A portion of this* reflects excess vacancy, above “natural vacancy”

30

20%

1,068

18.6%

689

1,006

5,000

17.6%

17.3%

20

18%

4,000

10

16%

0

14%

3,000

MSF

-10

12%

4,730

4,617

4,554

2,000

-20

10%

1,000

-30

8%

-40

6%

0

Q4 2019 Current

2030

Occupied Space Vacant Space

2001 Q1

2002 Q1

2003 Q1

2004 Q1

2005 Q1

2006 Q1

2007 Q1

2008 Q1

2009 Q1

2010 Q1

2011 Q1

2012 Q1

2013 Q1

2014 Q1

2015 Q1

2016 Q1

2017 Q1

2018 Q1

2019 Q1

2020 Q1

2021 Q1

2022 Q1

2023 Q1

43

Source: MSCI Real Capital Analytics, Cushman & Wakefield Research. *See our Obsolescence Equals Opportunity Report for more detail.