According to a Moody's report, office sector vacancy rates have set a new record at over 20% in the second quarter. The author behind the report and Moody's head of CRE economics, Tom LaSalvia, joins Market Domination to give insight into the report and detail what's behind these record numbers.
LaSalvia elaborates on the shift of office space use: "The way we're thinking about this as obsolescence, that there is a good 10 to 20% of office buildings out there that really just will not be able to compete in this new era, this era of remote work, this era of new offices, this era of new, let's say, centers of power in terms of where office-centric locations are, right? You're getting migration into the Sunbelt. You're seeing even within metropolitan areas like New York, certain submarkets doing much better than others. And so what you're left with is 10 to 20% of obsolete offices that are going to have to find some new life in this new era."
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