A nightmare has been unfolding. There were issues before working-from-home and “hybrid work models” slashed current and future real-estate needs of office tenants in the major office markets in the US. And now office footprints got slashed, and companies put their leased but vacant office space on the sublease market, undercutting landlords that want to direct-lease vacant offices.
Houston has been the hardest-hit major office market in the US since the oil bust collided with a phenomenal office construction boom in 2015. Availability rates soon were over 20%. But in Q2 2021, they’re over 31% — meaning that nearly one third of the office space is sitting on the market! And San Francisco, three years ago the hottest and tightest office market in the US, is now coddling up to Houston, with a historic office glut.It Gets Ugly in US Office Markets, Working from Home Shows Up | Wolf Street