Office Occupancy Hits Pandemic-Era High

At Cresa, we are seeing a steady return to the office, even with new COVID-19 variants appearing.  We feature this Bisnow article by Jared Schenke that presents data showing that office occupancy is now at an all-time high since the start of the pandemic.  Some highlights:

-          Average office building occupancy across the 10 largest office markets rose to 40.6% on Dec. 1, 8.1% higher than the post-holiday week last year, according to Kastle Systems, which tracks electronic keycard, fob and building access data.

-          The average office occupancy in Kastle's 10-city barometer has been steadily increasing since September, when 33.6% of employees were back in the office. The legal industry has led the way in returning to the office, with law firms on average 56.3% occupied nationally.

-          With more than 60% of the U.S. either partially or fully vaccinated, many workers are expressing a desire to come back to offices.

-         With many companies establishing permanent hybrid work models, offices will not fill up on a daily basis at numbers seen prior to the pandemic any time soon.

As we enter 2022, your business may still be determining what office footprint it needs post pandemic.  We can help.  We will represent your interests 100% of the time and we have a talented team of analysts that can help you align your companies’ goals and strategies with an appropriate commercial real estate solution.  Contact me at www.tenant-broker.com if we can start a conversation.

Office Occupancy Hits New Pandemic-Era High

December 9^th, 2021

Jared Schenke, Bisnow Atlanta

Despite the lingering effects of Thanksgiving dinners across the nation, more workers returned to office buildings in the first week of December than at any point in the last 18 months.

Average office building occupancy across the 10 largest office markets rose to 40.6% on Dec. 1, 8.1% higher than the post-holiday week last year, according to Kastle Systems, which tracks electronic keycard, fob and building access data.

Texas and California continue to be at the extremes in office return: Austin and Houston, at 59.3% and 54.9% of pre-pandemic levels, respectively, have the most heavily trafficked office buildings, while San Francisco saw occupancy hit a pandemic high-water mark of 28.3%.

While the coronavirus's delta variant continues to spread and send cases rising nationally, fresh concerns have arisen over the omicron variant, with early reports suggesting the new variant is more contagious and less deterred by vaccines, although possibly less severe. Nineteen U.S. states have thus far reported cases of people affected by omicron.

The average office occupancy in Kastle's 10-city barometer has been steadily increasing since September, when 33.6% of employees were back in the office. The legal industry has led the way in returning to the office, with law firms on average 56.3% occupied nationally.

While patrons have been filling up restaurants and fans have been crowding sports stadiums and concert halls, the return to the office has lagged, Kastle Chairman Mark Ein said. That dynamic has much to do with the C-suite, whose members feel a responsibility toward their employees and are reluctant to rush a return to the office.

Besides, the jobs housed in office buildings can often still be done from home, as the pandemic has proved.

“There is no workaround for a restaurant being in business if people aren't coming or a sports team being in business if people aren't coming,” Ein said. 

With more than 60% of the U.S. either partially or fully vaccinated, many workers are expressing a desire to come back to offices. Half of 1,000 full-time workers surveyed by Workhuman, a cloud-based employee-management firm, said they were either excited or happy to return to the office, Fortune reported. Fifteen percent said they were anxious about returning to the office. More than 80% of workers had already visited the office once in the past month, according to the survey, which was conducted the week of Dec. 6.

Coronavirus variants — and talent shortages — have kept many large companies cautious about requiring workers to report back to the office. Google, Wells Fargo, Ford Motor Co. and ride-sharing operator Lyft all recently announced delays of returning workers to the office until next year.

With many companies establishing permanent hybrid work models, Ein said he doubts offices will fill up on a daily basis at numbers seen prior to the pandemic any time soon. But, he said, he does expect a surge come January, especially now that more people have fewer health concerns about Covid.

“At this point, what companies are dealing with more are employees who say, 'I just want the flexibility to work from home,'” he said. 

End of Article

If you have significant questions about your current real estate strategy, it may be time for a discussion.  Once we have started our conversation, we can create a strategy to look at your business operations and current space and then craft up a plan to find something that is a great fit in the area.  With the current vacancies and inventory, we will work with you to get the best deal.  We represent tenants ONLY, so you can feel comfortable that we are working for your business 100%.  If we can help you by being your tenant broker in the DC, Maryland, or Northern Virginia area, visit my website or call me at 301-841-6542.  Make sure to follow all my social efforts by clicking on the links below. 

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