US office buildings are facing a 30% price drop as remote work continues to upend the sector, Morgan Stanley says

Mon, 02/12/2024 - 10:58

FILE PHOTO: A man walks past The Gherkin and other office buildings in the City of London, Britain November 13, 2018. REUTERS/Toby Melville/File Photo — FILE PHOTO: A man walks past The Gherkin and other office buildings in the City of London
Thomson Reuters

Office buildings are facing a 30% peak-to-trough price correction, Morgan Stanley warned.
The sector has yet to fully adjust to the massive disruption of remote work.
US commercial real estate is headed for a $2 trillion wall of maturing debt in the next few years.

America's office market is in flux and prices have further to fall amid "secular" challenges facing the sector, Morgan Stanley analysts said in a note.

The bank pointed to persistent pressure weighing on the office property market, with prices already having fallen around 20% from their peak, according to data from Real Capital Analytics cited by Morgan Stanley.