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Visualizing 1 Billion Square Feet of Empty Office Space

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Visualizing 1 Billion Square Feet of Empty Office Space

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1 Billion Square Feet of Empty Office Space

In April, one of America’s largest office owners, Brookfield, defaulted on a $161 million loan.

The loan, covering 12 office buildings, was mainly concentrated in the Washington, D.C. market. Faced with low occupancy rates, it joined other office giants Blackstone and WeWork defaulting on office debt this year.

The above graphic shows nearly 1 billion square feet of empty office space in the U.S. based on data from JLL—and the wider implications of office towers standing empty.

Ranking U.S. Cities by Empty Office Space

At the end of the first quarter of 2023, a record 963 million square feet of office space was unoccupied in America. An estimated five to 10 office towers are at risk of defaulting each month according to Manus Clancy, senior managing director at Trepp.

Here are cities ranked by their total square feet of office vacancy as of Q1 2023. Figures include central business districts and suburban areas.

Ranking MarketTotal Vacancy (SF)Total Vacancy (%)
1New York75.8M16.1%
2Washington, D.C.74.0M20.8%
3Chicago63.2M23.5%
4Dallas53.5M25.0%
5Houston49.3M25.6%
6Los Angeles47.1M24.1%
7New Jersey43.3M25.8%
8Atlanta38.1M21.6%
9Boston31.8M19.1%
10Philadelphia27.8M18.8%
11Denver27.3M21.6%
12Phoenix25.2M23.9%
13San Francisco22.8M26.4%
14Seattle21.4M17.7%
15Minneapolis19.9M19.7%
16Detroit18.0M19.3%
17Orange County17.7M17.6%
18Salt Lake City13.9M18.5%
19Kansas City13.8M20.8%
20Pittsburgh13.8M21.8%
21Charlotte13.7M20.6%
22Austin13.6M18.9%
23Baltimore13.1M18.2%
24Portland12.8M17.5%
25Silicon Valley12.1M17.3%
26Oakland–East Bay11.7M22.0%
27San Diego10.7M12.3%
28St. Louis10.5M21.9%
29Cincinnati10.1M21.4%
30Sacramento9.9M19.6%
31Fairfield County9.7M25.4%
32Columbus9.7M21.7%
33Milwaukee9.2M24.0%
34Nashville9.0M18.9%
35Raleigh-Durham8.9M15.2%
36Indianapolis8.6M22.4%
37Tampa8.2M17.2%
38Fort Worth7.6M16.7%
39Miami7.6M16.2%
40Cleveland7.3M18.3%
41San Antonio7.2M17.8%
42Long Island6.3M15.2%
43Westchester County5.8M22.1%
44Jacksonville5.4M18.6%
45Orlando5.0M13.3%
46San Francisco Peninsula4.4M13.3%
47Richmond4.3M13.3%
48Fort Lauderdale4.3M16.1%
49North San Francisco Bay4.0M18.3%
50Louisville3.6M16.8%
51Des Moines3.2M12.0%
52Hampton Roads3.1M14.7%
53West Palm Beach2.4M10.3%
54Grand Rapids1.8M13.2%
United States962.5M20.2%

Numbers may not total 100 due to rounding.

New York has roughly 76 million square feet of empty office space. If this were stacked as a single office building, it would stretch 7 miles into the atmosphere. In 2019, the office sector accounted for about a third of all jobs in the city.

Falling closely behind is Washington, D.C. with a 21% vacancy rate—8% higher than what is typically considered healthy. Occupiers are downsizing given remote work trends, yet some office buildings are being converted to residential properties, curtailing vacancy rates.

Across 54 markets in the dataset, San Francisco has the highest vacancy rate at over 26%. Prior to the pandemic, vacancy rates were about 4%. This year, Salesforce walked away from a 30-story tower in downtown San Francisco spanning 104,000 square feet in an effort to cut costs.

Overall, rising interest rates and higher vacancies have hurt U.S. office markets, with many cities potentially seeing an uptick in vacancies going forward.

Empty Office Space: Impact on Banks

Office building valuations are projected to fall 30% in 2023 according to Richard Barkham, global chief economist at CBRE Group.

A sharp decline in property values could potentially result in steep losses for banks. This is especially true for small and regional banks that make up the majority of U.S. office loans. Big banks cover roughly 20% of office and downtown retail totals.

Consider how commercial real estate exposure breaks down by different types of banks:

Bank AssetsCommercial Real Estate Loans
% of Total Assets
Share of Industry Assets
<$100M11.3%0.2%
$100M-$1B26.9%4.7%
$1B-$10B32.5%9.7%
$10B-$250B18.1%30.1%
>$250B5.6%55.5%

Source: FitchRatings

For big banks, a recent stress test by the Federal Reserve shows that a 40% decline in commercial property values could result in a $65 billion loss on their commercial loan portfolios. The good news is that many big banks are sitting on healthy capital reserves based on requirements set in place after the global financial crisis.

Smaller banks are a different story. Many have higher loan concentrations and less oversight on reserve requirements. If these loan portfolios deteriorate, banks may face a downgrade in ratings and higher credit losses.

Additionally, banks with loans in markets with high vacancy rates like San Francisco, Houston, and Washington, D.C. could see more elevated risk.

How High Rates Could Escalate Losses

Adding further strain are the ramifications of higher interest rates.

Higher rates have negatively impacted smaller banks’ balance sheets—meaning they are less likely to issue new loans. This is projected to cause commercial real estate transaction volume to decline 27% in 2023, contributing to lower prices. Banks have already slowed lending for commercial real estate in 2023 due to credit quality concerns.

The good news is that some banks are extending existing loan terms or restructuring debt. In this way, banks are willing to negotiate new loan agreements to prevent widespread foreclosures from hurting their commercial loan portfolios. Short-term extensions on existing loans were often seen during the global financial crisis.

Still, foreclosures could take place if restructuring the loan doesn’t make financial sense.

Overall, only so many banks may be willing to wait out the uncertainty with loan extensions if fundamentals continue to worsen. Offices that are positioned to weather declines will likely have better quality, location, roster of tenants, and financing structures.

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Ranked: Which NBA Team Takes Home the Most Revenue?

The Celtics and the Mavericks are the fourth and fifth highest-earning teams in the NBA. We show the top teams in the NBA by revenue in 2023.

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This circle graphic shows the top teams in the NBA by revenue during the 2022-2023 season.

Which NBA Team Takes Home the Most Revenues?

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

The NBA is projected to earn $13 billion in revenue this year before revenue sharing and debt payments, a 11% jump from last season, driving NBA team valuations even higher.

Since 2005, NBA team valuations have increased faster than any other major U.S. league by a wide margin. For perspective, the rise in their combined valuation has exceeded growth in the S&P 500 by more than threefold during this time period.

This graphic shows the top NBA teams by revenue, based on data from JP Morgan Asset Management.

Ranked: The Highest-Earning NBA Teams

Below, we show the revenue of all 30 NBA teams as of the 2022-2023 season:

RankingTeam2022-2023 Season
Revenue
Valuation
1Golden State Warriors$765M$7.7B
2Los Angeles Lakers$516M$6.4B
3New York Knicks$504M$6.6B
4Boston Celtics$443M$4.7B
5Dallas Mavericks$429M$4.5B
6Los Angeles Clippers$425M$4.7B
7Houston Rockets$381M$4.4B
8Chicago Bulls$372M$4.6B
9Philadelphia 76ers$371M$4.3B
10Miami Heat$371M$3.9B
11Brooklyn Nets$367M$3.9B
12Phoenix Suns$366M$4.0B
13Denver Nuggets$348M$3.4B
14Cleveland Cavaliers$348M$3.4B
15Milwaukee Bucks$329M$3.2B
16Atlanta Hawks$326M$3.3B
17Washington Wizards$323M$3.5B
18San Antonio Spurs$319M$3.3B
19Toronto Raptors$305M$4.1B
20Portland Trail Blazers$300M$3.1B
21Sacramento Kings$289M$3.3B
22Utah Jazz$274M$3.1B
23Detroit Pistons$274M$3.1B
24Charlotte Hornets$269M$3.0B
25Oklahoma City Thunder$267M$3.1B
26Indiana Pacers$263M$2.9B
27New Orleans Pelicans$262M$2.6B
28Orlando Magic$261M$3.0B
29Minnesota Timberwolves$259M$2.5B
30Memphis Grizzlies$258M$2.4B

Revenue figures are net of arena debt service and revenue sharing

With $765 million in revenue, the Golden State Warriors are the highest-earning team in the league, thanks to the stellar performances of all-star players Klay Thompson, Stephen Curry, and Draymond Green.

These players were instrumental in driving the valuation of the franchise, which grew from $1.5 billion in 2015 to a remarkable $7.7 billion in 2023. At this valuation, the Golden State Warriors are the second-most valuable sports team in America, following after the $9 billion Dallas Cowboys NFL franchise. Since 2010, the Warriors’ revenue has increased by sevenfold.

Not only did the team have the highest NBA TV ratings in seven of the last eight years as of last season, the Warriors have the largest social media following across U.S. sport franchises, including 32.4 million Instagram followers. By comparison, the Lakers have 24.6 million followers. Adding to this, the team’s jersey patch deal with Rakuten is worth approximately $45 million per season alone.

Ranking in second are the Los Angeles Lakers, earning $516 million in revenue. Over the last decade, revenues have increased by 76% fueled by the star power of LeBron James and the team’s world-renowned brand. In 2021, the team signed a five-year $100 million jersey patch deal with Korean food brand, Bibigo, making it one of the most valuable in the league.

The New York Knicks are third in revenue with $504 million, followed by the 2023-24 season champions, the Boston Celtics with $443 million in the 2022-23 season and the Dallas Mavericks in fifth at $429 million.

How Do NBA Teams Earn Revenue?

Below, we show the primary sources of revenue for the National Basketball Association (NBA):

Revenue Stream2022-2023 Season
Revenue
Share of Revenues
National Revenue
(Media/broadcast deals, merchandise, shared ticket revenue, other sponsorships)
$4.5B41%
Seating/Suites$2.9B26%
Local Media$1.4B13%
Team Sponsorships$1.3B12%
Concessions/Parking/Other$0.9B8%

As we can see, national revenue makes up the league’s largest share, driven by broadcasting and streaming agreements with national providers.

Going forward, these contract values are set to grow substantially. Today, the league is negotiating broadcasting deals with Amazon, ESPN, and NBC worth an estimated $76 billion over 11 years—making the annual contract value 2.6 times higher than its current contract. With NBA viewership up 16% across ESPN and ABC compared to the 2021-2022 season, strong demand is driving bigger media deals. During the 2022-2023 season, average viewership reached 1.7 million per game across these outlets.

Ticket and suite sales, another key source of revenue, topped $2.9 billion over the 2022-2023 season. In some cases, courtside tickets cost upwards of $3,000 per seat, with a host of celebrities from Jack Nicholson to Kendall Jenner and Bad Bunny sitting close to the action.

Following next in line were local media deals, worth $1.4 billion, and team sponsorship deals, valued at $1.3 billion.

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