COVID-19 Will Force the Office Sector to Evolve (Further)

Analysis by Dr. Victor Calanog & Vivek Thadani 

We must recognize that the impact of COVID-19 on the US economy is unprecedented. Moody’s Analytics expects US GDP to decline by 30% on an annualized basis in the second quarter of 2020— triple the severity of the previous record decline of 10% in the first quarter of 1958. Over the course of all of 2020, US GDP is expected to fall by 6.6%, a larger magnitude than the decline in economic activity in 2008-2009, concentrated mostly in the second quarter, prior to reopening the economy.

How will COVID-19 reshape the dynamics of office space as an income-generating asset class? In fact, the office sector has changed significantly over the last four decades. In this paper, we will discuss why the COVID-19 crisis is likely to accelerate this evolutionary process. Where are the transformational effects likely to be felt with greater impact, and why?

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Victor Calanog, PhD CRE® is the Head of CRE Economics at Moody’s Analytics REIS. He and his team of economists and analysts are responsible for the firm’s market forecasting, valuation, and real estate portfolio analytics services. He holds a PhD in Applied Economics and Management Science, trained by a dissertation committee composed of faculty from the Wharton School of the University of Pennsylvania and Harvard Business School.

Vivek Thadani is the Head of Product at Moody’s Analytics REIS. Vivek and his team are responsible for discovering new strategic partnerships to build out innovative solutions for CRE professionals. Vivek holds a B.E. in Computer Science from Mumbai University and a M.E.M. from Dartmouth College.


Looking for additional insights? Explore our interactive COVID-19 map to analyze the potential impact on commercial real estate markets.


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