Commercial real estate analysts say office vacancy rates have peaked at 24% nationally and are expected to slowly decline as companies finalize hybrid work policies and older buildings convert to residential.
Recovery Signals
- Vacancy rate: 24.3% (peaked Q1 2026)
- Class A offices: 15% vacancy (strong demand)
- Class B/C offices: 35%+ vacancy (conversion candidates)
- $85 billion in office-to-residential conversions planned
The commercial market is splitting: premium Class A spaces with amenities see strong demand, while older Class B/C buildings face permanent demand destruction from remote work.
