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Who in the world would have believed that two years ago in February, colleges would send students home and offices, beginning with “Big-Tech,” would close down and tell their employees to work from home as fears of the coronavirus spread from China?
And back then, when politicians jumped on board to fight the COVID War, they issued unscientific mandates that the plantation workers of Slavelandia must lockdown in their homes to “flatten the curve”… a curve that mind-twisted politicians and their bureaucrats ordered that was never flattened.
Yet, regardless of the pure stupidity of these orders, they are long forgotten and no one is held accountable for their gross failures and the financial and mental damage inflicted upon society.
More Dumbing Down
Then, despite their draconian mandates that failed, those in charge of what used to be called “democracies” issued, and continued to issue, more made-up bullshit to beat the coronavirus. With the majority of the population following orders, as they always do, the word on both Wall Street and Main Street was that “normalcy” would soon return: “It’ll come back” was the refrain from the brainwashed.
The popular narrative was that the coronavirus would disappear, life would pick up to where it was before the virus appeared and people would be going back to the office by early September 2020.
It did not happen.
A year later, with the rate of office occupancy below 40 percent in America, the line being sold was that office workers would be back by early September 2021.
That didn’t happen.
With COVID Fear & Hysteria the major mainstream media narrative and power hungry politicians issuing more mandates, the work-at-home trend solidified.
Then, heading into 2022, following the spread of the Delta variant and then Omicron COVID, the “hope” that workers would return to the office by early September, then January 2022, again faded.
The Future
We had been forecasting since the early stages of the COVID War that one of its far-reaching impacts would be a big-time shakeup in the very nature of workers “going to the office,” and that would bring extensive and unwelcome changes to the commercial real estate sectors. However, despite the reality of empty office space and office occupancy rates more than 60 percent below their 2019 pre-COVID War levels, commercial real estate prices have not plummeted.
In “AS FORECAST: NYC COMMERCIAL REAL ESTATE CRISIS WORSENS” (Aug 24 2021), we noted that, when we had forecast a sinking commercial real estate market back in March 2020, Wall St. denied it and mainstream media refused to publish our forecasts. But time is proving our forecasts correct. And while we take no great joy in seeing our dire forecasts vindicated, neither does that diminish their accuracy.
An article in The Wall Street Journal, on 13 January, reports that companies are rethinking the idea of predicting when their offices would fully reopen and office workers would return. They are realizing that a return to normalcy is anything but “just around the corner,” and that COVID-19 and its impacts are going to be with us for a long time.
Whether it’s the new variants popping up to scuttle projected schedules for bringing workers back to their office, or the realization that, like it or not, the longer people work from home, the harder it is for them to overcome that inertia and return to the office—see “ONE-THIRD U.S. WORKERS WILL QUIT IF FORCED TO RETURN TO OFFICE” (9 Mar 2021)—companies are concentrating more on alternatives to fully repopulated office spaces.
Among them, they will be bringing groups of workers in to address specific projects and then, upon completion, having them return to working remotely, or determining how many workers should return to offices based on up-to-the-minute infection rates.
Thus, companies do their best to maintain and take advantage of flexibility in their office work strategies. But there’s little flexibility for office landlords who see anything but a rosy future in the fact that an average of only 28 percent of the workforce returned to the office last week in ten major cities.
TREND FORECAST: Office occupancy rates will not return to pre-COVID War levels, and work-at-home-part-time will become part of 21st century life. Tenants will cut their losses by offering to sublet their unused space, putting them in competition with their own landlords. Also, office spaces will be retrofitted as apartment buildings.
This drives down prices and forces smaller commercial landlords out of business, letting the “bigs” buy up property at fire sale prices and get even bigger, but not before impacting cities’ tax revenues; see “OFFICE WORKERS’ SLOW RETURN ENDANGERS LANDLORDS, CITY FINANCES” (9 Mar 2021). Rising interest rates don’t help, either.
TREND FORECAST: We maintain our forecast that the COVID War will begin to wind-down late March, mid-April. Thus, there will be a strong bounce-back to office occupancy rates. However, there will still be more building supply than office demand. And, until, or if, vaccine passport requirements are lifted, there will be continued downward economic pressure on office occupancy rates and the businesses that profit from high commuter traffic.
Indeed, confirming our trend forecast made nearly two years ago, according to Ladders Quarterly Remote Work Report, as of the last quarter of 2021, 17 million professional jobs, or 18 percent of the professional workforce in the U.S., are now permanently remote. Just 3 million jobs were remote prior to the start of the COVID War back in 2019.