Office Market Nears ‘Peak Downsizing’: CBRE Report Highlights Changing Trends

[Sanjeev Advani]

CBRE’s latest survey reveals a potential turning point in the office market. Among 225 corporate real estate executives surveyed across the U.S., Canada, and Latin America, 38% expect to expand office space over the next three years, up from 20% last year. Meanwhile, the percentage of companies planning to downsize dropped to 37%, the lowest since 2021.

Julie Whelan of CBRE noted positive net absorption for the first time since Q3 2022, signaling potential recovery. However, office vacancy rates are still expected to peak in mid-2025 at 19.8%.

Smaller companies are stabilizing and shifting toward expansion, while 58% of larger firms continue downsizing. The report emphasizes the need for CFOs to leverage data on submarket dynamics to negotiate better deals.

While challenges remain, the office market’s evolving landscape presents growth opportunities for strategic decision-makers.

[Bradley Buxton]

How much of that net absorption in people trying to buy at the bottom of the market? Work from home flex schedules is not going away and large offices are not coming back. Once the infrastructure improves where people can live near where they work and commute times are under 30 minutes there could be a return to the office. It looks like data presented to make decision makers look better as they hold on to the old idea of the traditional office.