Fact or Fake? Does a rise in vacancy mean a region is in crisis?

One of the biggest stigmas in the Real Estate market is the rise in vacancy rates within a region — but is it always a bad sign?

Milton Meyer, President of MPD Engenharia, developer of Verve Pinheiros

By: SiiLA News

10/31/2025

In the commercial real estate market, there are several metrics to understand a region’s context — whether the market is heating up or facing challenges. Among them, the most eye-catching for investors is the vacancy rate, which shows what percentage of an area or development is unoccupied.

Common sense says that if vacancy increases, it’s because companies are leaving the area, returning properties, and therefore, the market is struggling. Right? Not necessarily.

It’s true that in some cases, rising vacancy may indicate higher leasing costs, market disinterest, or even an unfavorable location. This is particularly relevant in the logistics sector, which depends on proximity to highways, ports, and airports for product distribution.

But there are exceptions — and good ones. Take the case of Greater ABC in the logistics segment: in the second quarter of 2025, the region recorded a 9.5% vacancy rate. In the following quarter, the rate jumped to 20.18%. At first glance, an increase of 10.68% could seem like a sign of companies leaving — but the reason is quite different.

The rise is due to the delivery of two new developments, CL Imigrantes IV and CL Imigrantes VI. Since these newly built properties have not yet been leased, the available supply increased — and naturally, so did the vacancy rate.

The arrival of new, high-standard developments does not signal a slowdown. On the contrary, it shows there is demand in the region and that existing spaces were nearly fully occupied.

Of course, attention is needed. If this new supply isn’t absorbed over time — meaning if companies don’t lease these spaces — then it could indeed indicate local market weakness.

Office Market

In Pinheiros, since the third quarter of 2024, 14 developments have been delivered. Of these, eight are not yet fully occupied, with vacancy rates per building ranging from 44% to 100%. For example, the Verve Pinheiros, developed by MPD and delivered at the end of 2024, and the JT Jockey, also delivered late last year, remain 100% vacant.

Even so, it’s not accurate to say the region is cooling down. There are ongoing lease negotiations, new contracts being signed, and the natural challenge of keeping a property 100% leased for long periods. Companies evolve — they grow, downsize, hire, lay off, and change work models (hybrid, on-site, or remote) — all of which directly impact property occupancy.

In summary, it’s neither fact nor fake. The statement is partially true, depending on the context and other regional metrics. Real Estate is not a static photo — it’s a living, breathing system in constant motion. Not every vacancy indicates weakness; sometimes, it’s just the market adjusting after a period of transformation.

MPD Engenharia

In a statement to REsource, MPD explained the concept behind the project, classifying it as a mixed-use asset that is already 100% leased in its residential portion, proving its attractiveness and appreciation potential. Regarding the commercial side, the company commented that the current vacancy is part of Pinheiros’ natural process of becoming a consolidated high-standard corporate hub:

“MPD sees the increase in vacancy in Pinheiros as a natural movement in the consolidation of the region as a high-end corporate hub.”

On what the construction represents for MPD and the market’s response, the company added:

“The project reflects MPD’s vision for the future of corporate spaces in São Paulo — environments that go beyond work, promoting quality of life, design, and an integrated experience.
The market’s response is within expectations. MPD maintains a curation strategy for occupancy, prioritizing partners who share Verve Pinheiros’ premium concept and add value to the project, rather than focusing solely on speed of leasing.”

About Verve Pinheiros

By SiiLA

Located at Rua dos Pinheiros, nº 1005, this Class A building has a total private area of 3,459 m².

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