US Office Crisis: What It Means for Prague and CEE

American office buildings are selling at fractions of their former value — a Chicago tower that once fetched $68 million recently changed hands for just $4 million. MSCI recorded 204 distressed office sales last year totalling $5.2 billion. The numbers are striking, but the structure behind them matters more than the headlines.

The US market was built around scale: enormous buildings leased to single corporate tenants. When Chevron or Google vacates over 100,000 sqm in one strategic decision, an entire tower collapses economically overnight. Nearly 60% of large US office buildings have dropped below 90% occupancy since the pandemic — and only 8% of total stock is capturing essentially all new tenant demand.

Central Europe evolved differently. A typical Prague office building runs 15,000–25,000 sqm with five to fifteen tenants. Shared-service centres — the backbone of the CEE office market — lease significant space, but rarely an entire building. When one tenant leaves, landlords face a difficult re-leasing exercise, not an existential crisis.

That structural resilience is real — but it shouldn't breed complacency. The same interest-rate pressures compressing US valuations apply across the Eurozone. And the deeper question for Prague and Warsaw is whether AI will reshape the white-collar headcount that shared-service centres depend on — creating cliff events with a different trigger, but similar consequences.