Skip to content
Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

RETURN TO OFFICES POSTPONED: COMMERCIAL REAL ESTATE BUST?

Office spaces in 10 major U.S. cities saw occupancy rates of 33 percent in the week ended 25 August, dipping from 35 percent in late July, according to Kastle Systems, which tracks swipe card use in more than 2,500 business buildings.
Offices in New York and San Francisco were the most lightly attended at 22 and 20 percent, respectively, also slightly below their July high marks, Kastle reported.
Commercial landlords had expected the fall would bring workers back to their downtown locales, but Amazon, Apple, and other companies have pushed back their return dates until next January or later, as we reported in Blackrock, Amazon Delay Return to the Office (10 August, 2021). 
While most companies continue to pay rent on space not being used, the longer employees work from home, the more normal the practice becomes and companies will recognize the need for less office space in the future.
HSBC has announced that most workers will permanently work from home at least some of the time (see related story); Facebook announced months ago that it would become an all-remote company.
The loss of commuters to city centers continues to endanger the economic ecosystem of restaurants, shops, gyms, food trucks, and other businesses that desk workers support.
TRENDPOST: The latest news bears out our forecast made in “Amazon Pushes Back Return for Corporate Workers, But Those at Fulfillment Centers Must Report to Work” (10 Aug 2021): The more people who work remotely, the further commercial real estate prices will fall. In turn, businesses and transportation systems that relied on commuters will economically suffer, as will the workforce once employed in those sectors.
The shift to working at home will redefine economic ecosystems, especially in urban centers. Commuters buy lunch, gifts, clothes, gadgets, and other items in locales where they work; as workers stay home, downtown stores and restaurants will lose their traditional customer base and gas stations along commuter routes will see business plummet.
At the same time, owners of commercial real estate will face a reckoning as they slash rents to lure a shrinking base of tenants, forcing them to demand property tax concessions from cities that will struggle even more to maintain police, fire, and public works infrastructures.