Workers will likely spend 20% to 25% less time in the office than pre-pandemic, Bloomberg News quoted CBRE CEO Bob Sulentic as saying. Sulentic said during a panel Thursday hosted by the Dallas Regional Chamber that companies such as CBRE seek to balance in-person work with the recognition that people don’t want to spend hours in traffic.
“We’re still trying to figure out what the optimal place is,” he said.
Office landlords have faced declining tenant demand as more companies adopted remote-work policies. That’s pushed the U.S. office vacancy rate up to 18.4% in the third quarter, according to CBRE.
Landlords have also been pressured by the rise in borrowing costs, which has contributed to a nearly 21% decline in office prices in the 12 months through October, according to Green Street. Investors including Brookfield Asset Management have defaulted on debt and walked away from buildings, reported Bloomberg.
Sulentic said higher borrowing costs have dented commercial real estate valuations more than his firm originally forecast. “We thought values may come down 15%, 20%,” he said. “We now think that may be another 10%.”