Office vacancy rates have risen modestly to 18.3% (see Figure 8). However, actual office usage has declined much more as the work-from-home response to the pandemic became widespread. This decline has had limited financial impact to date because office rentals are usually held in multiyear leases with credit-worthy tenants (see Figure 9). However, there is considerable uncertainty about whether and how demand for office space will change over the long run.
Author(s): Office of Financial Research
Publication Date: 17 Nov 2021
Publication Site: Office of Financial Research, Treasury Department
There remains a striking contrast between the quick recovery of financial markets and the slower recovery of the economy, which experienced the highest unemployment rate since World War II (see Figures 5 and 6). The possibility remains for heavy ongoing credit losses and failures. Consumer spending and business investment face pervasive uncertainty about the course of the pandemic and its consequences.