The push by companies to get their employees to return to the office hasn't been enough to revive America's ailing office sector, with prices for office buildings ending lower in 2024 and expected to drop further throughout 2025.

Office prices continued to slide in 2024, with the average price dropping 11% to $174 per foot last year, according to a report from Yardi Matrix, a commercial real estate intelligence firm.

Since 2019, the average sale price of an office building has plunged 37%, the report said, attesting to the lasting impact of the pandemic and work-from-home trends on the office sector.

Office buildings will likely continue to be the worst-performing sector of the commercial real estate market for at least the next five years, Capital Economics said in a note at the end of 2024.

Researchers at the firm said they anticipated office values dropping another 10% from the third quarter of 2024 through 2029.

"Though we think the market has bottomed, we expect a very weak recovery this year, unlike in other cycles," the research firm said in a report at the start of 2025. "In fact, we think valuation falls still have further to go, leaving our forecasts generally below consensus."

Darrell Wheeler, the head of commercial mortgage-backed securities research at Moody's, also anticipates the US office market will continue to struggle, and will hit a bottom sometime in 2025.

Not all parts of the US office market are doing poorly, he said, but areas that have seen significant price drops include those where office vacancy rates have remained elevated, which has weighed on values.

And while return-to-office mandates have pressured some workers to get back to commuting to work, it'll take a while for companies to implement concrete policies regarding in-person attendance, Wheeler said. He expects debates over the return-to-office to stretch out until at least 2027 as companies decide the best policy for their employees.

"While it's sounding pretty clear — financial institutions are supposed to be into the office five days a week — that's certainly not the case for all the industries and different work models," Wheeler said.

CommercialEdge data shows that the national office vacancy rate was nearly 20% in January, up 180 basis points from the same month last year.