For years, vacant office space in most markets has been concentrated in a relatively small set of properties. Today, however, high-vacancy buildings account for an even larger share of unused space than they did five years ago.
The post-pandemic reset in office demand has also pushed more properties past the high-vacancy threshold, underscoring the challenges facing owners and investors.
While building financials can vary, occupancy levels below 75% often signal potential trouble. At that point, owners may struggle to cover debt service, property taxes, and operating expenses while still generating returns. As a result, a 25% vacancy rate is widely viewed as a key marker for identifying high-vacancy buildings.
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