In 2020, the pandemic has emptied offices and filled employee lounges with laptops and webcams. While some companies have discovered the benefits of teleworking, others have seen their million-dollar investments in thousands of square meters of offices stagnate without the slightest interest in renting.
Six years later, the script has taken a turn that almost no one saw coming. The owners of these buildings now have another problem that, although subtle, is very similar to housing.
The teleworking office is over. With a large portion of the workforce working from home, the real estate sector, which specializes in office rentals, has experienced its worst years with falling prices, building abandonment and a steady decline in the pace of construction.
Office vacancy rates in Madrid or Barcelona averaged around 10%, according to data from the Office Property Telescope 2023 report prepared by consultancy firm EY. A year later, Barcelona registered an unemployment rate of 21.3%, and Madrid had almost the same value.
Returning to the office was his lifesaver. In 2026, 15% of employed people in Spain will telework occasionally or frequently. This figure doubles the percentage of registered teleworkers in 2019. In the EU, 8.8% regularly worked from home in 2025, compared to 5.4% recorded by Eurostat in 2019.
As social distancing measures began to be relaxed, companies once again demanded their employees return to the office. This change in model heralds the reactivation of the office rental market. However, years of drought in investing and renovating these spaces have created a larger problem: a shortage of office space for growing demand.
From hell to heaven in two years. As many people returned, the good buildings were filled. According to a report by consulting firm JLL, “prime” office rents in Madrid will be around 44 euros per meter per month in 2026. This represents a 7.3% increase over the year-ago price.
In Barcelona, price growth reached 23% according to BNP Paribas Real Estate’s report for the second quarter of 2026. There, the downtown office vacancy rate is now just 1%. A drop of more than 20 points in just two years. Javier Fernández, Director of Office Capital Markets at JLL Spain, assures that we are experiencing a clear change in trend where “the Madrid prime office market has seen 21 quarters of rental growth and this trend will continue.”
None of these were built. This rise in office rental prices is explained as simply as the law of supply and demand. Between 2020 and 2024, investment in office construction and renovation has declined.
New construction today remains very limited and a good portion of what is being built has already been committed. Fernandez declared The Economist that “we still have very limited future supply, which is proportionally lower than the European average.” In any case, the increase in new office construction will not arrive in time to meet current demand due to long processing and construction periods due to scarcity of land for construction.
The offices that have already been built are also abandoned and in need of renovation after being vacant for years. JLL estimates the investment required to modernize prime offices in Madrid and Barcelona at 5.8 billion euros, with investment growth of 37% a year. And it indicates that more than 40% of the current office park, about 10.8 million square meters, could become obsolete in 2030.
The floor where the table was. Another reason for the shortage of rising office rents is that a good part of the office buildings already built in the heart of cities like Madrid or Barcelona have been converted into homes.
CBRE estimates that nearly one million square meters of office changed use in three years. More than 1.7 billion euros were invested in converting those offices into homes and hotels.
In Madrid, the law on converting offices into affordable rental apartments was extended for two years, but Fernández himself clarified that these actions to convert offices to residential use “mainly affect properties that have lost attractiveness for companies.”
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Picture | Unsplash (Clay Lake)
