OPI - Struggles ahead for U.S. office sector vacancy rates seen rising in 2021

Spanning across eight property types and 3K+ submarkets across the U.S., Moody's Analytics forecasted commercial real estate ((CRE)) rents and vacancies for Q4."Though we expect the office sector will suffer more severely in 2021 than it did in 2020, the vaccine rollout brings hope for more in-person business later this year and into 2022," Senior CRE Economist Barbara Denham commented.Pictorial: How badly hit is the CRE industry:Background:Vacancy rate is seen rising to 19.4% in 2021 (exceeding previous high of 17.6% from 2010) and holding steady in 2022.Despite a marginal dip of 0.7% in effective rents in 2020, average effective office rent is projected to decline by 7.5% in 2021 before steadying in 2022.Effective office rents are not likely to reach their pre-pandemic levels until 2026.Region-wise:Silicon Valley will be hit hard in 2021 with effective office rent declines of 15% for San Francisco and 13.3% for San Jose.New York is expected to see a rent decline of 8.9%

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Struggles ahead for U.S. office sector, vacancy rates seen rising in 2021