The U.S. office vacancy rate has reached 19.6%—an all-time high since Moody's Analytics began tracking data in the late 1970s. The article traces historical vacancy cycles, including peaks during the late 1980s/early 1990s, the post-9/11 decline, and the 2008 financial crisis aftermath.
Among the fundamental truths of investing is that there is rarely a time when every asset within an asset class is un-investable. The pandemic accelerated digital communication adoption, but this doesn't necessarily signal permanent office obsolescence.
Investment Thesis
Investors should view current conditions as opportunity rather than permanent decline. As assets trade at depressed valuations, rational investors will eventually recognize cyclical recovery potential, ensuring the asset class remains viable despite transformed equilibrium conditions.
Conclusion
Investor perception shapes outcomes: those declaring office investing permanently broken may inadvertently create the pricing conditions that restore cyclical attractiveness.