There's been a lot of speculation about the office sector and where it might end up. Betting on extremes, no matter which, is potentially dangerous even when the dynamics are well understood.
In the case of WeWork's bankruptcy filing, sitting atop a significant shift in the use of traditional office space, pointing to the most likely outcome is even more difficult.
"WeWork's Chapter 11 bankruptcy filing pressures an already precariously positioned office sector undergoing structural change," Moody's Analytics CRE recently noted. "At the national level, 2023 Q3 vacancy stood at 19.2%, perilously close to the 19.3% record high vacancy rate observed in 1986 and 1991 – Moody's Analytics CRE forecasts that by the end of this year, office vacancies will once again reach that 19.3%."
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