Almost four years since the pandemic started, office vacancy rates hit an all time high of 19.6% nationally, Moody’s Analytics reported Monday. The company has data going back to 1979. 

Last year was actually a big year for people going back to the office. 

“[It was] a year where organizations kinda decided who they were going to be,” said Julie Whelan with commercial real estate firm CBRE.

Would companies be fully remote? Fully in person? Hybrid?

She said many companies have landed on wanting people back in the office some of the time, but not every day.

“Which means that there is less space that’s needed because people aren’t occupying space as often,” Whelan said.

Imagine you’re the chief financial officer for a company that’s decided it’s officially going hybrid, said Matt Anderson at the real estate-focused data analytics company Trepp.

“If you happen to go in on a Monday or Friday, and you’re looking at all this empty real estate that you’re still paying rent for, I have to think that those CFOs are going to be thinking, ‘There must be something I can do here. Can I shrink my footprint?’ And so I think that’s part of what’s been going on,” he said.

The city that’s seen the biggest increase in office vacancies is San Francisco, said Nick Luettke at Moody’s.

“I think that that’s not going to catch anybody by surprise,” he said. “San Francisco has gone from an 8.8% vacancy rate to a 19.5% vacancy rate since the start of the pandemic.”

Other cities have seen big increases too, including Austin, Seattle and Raleigh-Durham, Luettke said.

Around the country, there’s a lot of talk of converting some of that vacant office space into much-needed housing. And it’s not just talk, said Julie Whelan at CBRE.

“Today, there are more conversions than ever that are happening at a national level,” she said.

But even so, she said, it’s still less than 1.5% of all the office inventory that’s out there.