US office vacancy rate hits new high

The office vacancy rate in the United States hit a record high in the first quarter of this year, nearing the 20 percent mark.

Moody's Analytics says 19.8 percent of office space was not leased in the January to March period. That's up 0.2 percentage points from the last quarter and surpasses the previous record.

The firm says the economy is robust and links the rise to the spread of so-called hybrid work models, which combine in-office and remote work.

The high office vacancy rate is casting a shadow over the US banking sector as it means lower rental income, resulting in a drop in the value of commercial properties.

The development comes as a rise in interest rates is already raising the cost of borrowing money. Some banks are under strain due to an increase in non-performing commercial real estate loans.