In the last week of January, for the first time since April 2020 when the COVID War began, more than half of U.S. white-collar workers spent time in central locations, according to data from Kastle Systems, which measures swipe-card use in more than 2,000 office buildings in 10 major metro areas.
The proportion of employees moved to 50.4 percent from 49.5 the week before.
All of the cities where Kastle collects data, including Austin, Chicago, and San Francisco, showed at least 40 percent of workers returning at least part-time, also a post-COVID first.
New York City’s rate is just 47.5 percent; San Francisco showed 45.9 percent of workers coming back.
Austin employers brought back 68 percent, the highest number. San Jose, in the heart of Silicon Valley, posted 41 percent, the lowest.
TREND FORECAST: Remember the bullshit being sold when politicians locked down the nation for several months on-and-off in 2020 and 2021: “It’ll come back,” was what the masses repeated after businesses were forced to close down and the masses forced to stay home… to “flatten the curve.”
And the “It’ll come back” was supposed to happen after the summer holidays. Yet, despite firms ordering the plantation workers of Slavelandia to return to work, many refused.
Therefore, businesses have reached the 50-percent milestone much later than originally expected because the COVID hysteria kept washing through the labor force.
Also, workers remain reluctant to give up remote or hybrid arrangements that they came to value during the COVID War era.
TREND FORECAST: Corporations expected this “milestone” to be met by mid-2021. Now, more than 18 months later, not even all cities Kastle monitors can boast that rate.
Even if all cities manage to lure half of pre-COVID commuting workforce back downtown, that would still be too few to resuscitate downtown economic ecosystems that depended on commuters or to rescue office landlords from a possibly lethal margin squeeze.
In our Top Trend 2023, “Office Building Bust,” we forecasted the office property crisis will accelerate through 2023 as landlords face stiffer competition to get and keep tenants, wrangle with local governments to try to minimize their tax assessments, and see their margins shrink—many to the point of disappearing.
As interest rates continue to rise—as they will through at least the first half of this year—many landlords with adjustable-rate mortgages or loans needing to be refinanced will hand their keys back to their lenders or offer their buildings for sale at fire-sale prices.
Property owners—including owners of retail space as well as office towers—will consolidate, with those having deep pockets or access to cash buying up others on the cheap.
As property values are reassessed downward, cities are confronting hard decisions about which workers and services to cut, a trend now biting into municipal budgets that we reported in “As Forecast: Business Office Bust Begins to Bite” (20 Dec 2022).