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Here’s Why Two Economists Think Clarity’s On The Horizon For Troubled Office Sector

2021 will be difficult for the office sector but ultimately it will be bolstered by expected growth in the professional and business services sectors.

By Lynn Pollack | April 01, 2021 at 07:32 AM

As the pandemic winds on, the big question of what will ultimately unfold for the hard-hit office sector is on everyone’s minds. But a recent analysis by Moody’s Analytics economists say clarity is on the horizon, with 2021 likely functioning as a “transition period” for the troubled asset class in many markets. 

Economists Barbara Byrne Denham and Thomas LaSalvia predict that 2021 “will be a difficult period for the office sector,” though they say a “seismic shift in the demand for square footage is unlikely.” A lag in CRE market stress is likely, they say, but will be followed by a “slow and steady return to pre-pandemic rents and vacancy rates.”

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