Zombie Office BuildingsNovember 1, 2021
Just before Halloween, Costar posted an article on the rise in the number of “Zombie Office Buildings” since the start of the pandemic.
The buildings that were tallied were at least 50,000 square feet or larger and they were at least 98% vacant. They reported that the number of buildings that met this criteria across the country increased by 23% in the second quarter of this year. The growth tapered in the third quarter to only 19%.
Buildings can be vacant for a number of reasons, the Covid-19 Pandemic is certainly the first reason that enters our minds but vacancy can also be due to developers building spec properties for new companies headed to town. As an example, when I looked at the list of Zombie Buildings I noticed that Austin, TX was at the top and we all know that there are a lot of companies moving to that location so it isn’t surprising to see an increase in vacant office buildings in that market.
Take a look at the chart below to see who is leading this list and who lead it a year ago. In a previous post, we noted that the pandemic is going to accelerate trends that were already happening and new trends started from the pandemic aren’t likely going to last. Let us know in the comments below what trends you think are here to stay.