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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.