The national office vacancy rate is up 480 basis points since the start of the pandemic, despite positive job growth during that time. This has eroded asset values by billions of dollars, but not all office buildings are feeling the pain equally.

The hardest hit 10% of buildings (those with the greatest increase in vacant sq. ft. from Q1 2020 to Q2 2022) account for the overwhelming share of the historic vacancy increase. Without the bottom 10%, U.S. office buildings recorded positive absorption over the past two years.

Class A-, not Class B or C, buildings comprise more than 70% (by sq. ft.) of the hardest-hit building group. These struggling A- properties were generally built during the 1980s to 1990s building boom. This commodity stock is greatly disadvantaged at a time when occupiers are consolidating their footprints in top-quality space — and are feeling an inordinate amount of the pain being caused by hybrid work.