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Go back to 2020.
Remember the bullshit line after politicians lockdown the nation?
“It’ll come back.”
Remember the bullshit line that they were locking down the nation to “Flatten the curve”?
No curve was flattened and the lockdowns continued.
Yet, throughout 2020, the word was that after Labor Day, people who had been locked up and working from home would be returning to the office.
We had forecast that that would not happen.
Fast Forward
Again, by summer 2021, the mainstream media was selling the line that by Labor Day, with vax rates climbing, commuters would be commuting back to work.
Most are still at home.
During Labor Day week, about 31 percent of white-collar workers had come back to central offices, according to Kastle Systems, which tracks swipe-card use in 10 major cities.
The proportion rose to 35 percent in the week ending 1 October and edged up to 36 percent the following week, Kastle reported.
Though rising, the numbers are a fraction of the returns that many companies predicted last spring, saying that a majority of workers would be back in their cubicles by fall.
Manhattan firms predicted 62 percent of their workers would be back downtown by September, according to a June survey by the nonprofit Partnership for New York City.
However, thanks to the Delta virus, the number reached only 21 percent by 1 September, rising to 30 percent for week ending 8 October, Kastle said, despite CEOs’ demand that workers return forthwith, which we reported in “CEOs to Workers: Back to the Office – Now” (27 Jul 2021).
Businesses near office towers have begun to feel the benefit of returning desk jockeys, The Wall Street Journal noted; Oceans, a midtown Manhattan eatery, has regained more than 60 percent of its pre-COVID business, with some evenings attracting 2019-size crowds, co-owner Paul McLaughlin told the WSJ.
TREND FORECAST: Even in the best of times, restaurants struggle. Losing 40 percent of their clientele will not only add up to lost income… it will be negative income and higher debt loads.
And we maintain our forecast that after working at home and feeling the luxury of not commuting hours back and forth to work, while there will be steady flow back to central offices, employees will be in no rush to return to work.
Thus, it will be many years before office occupancy rates return to pre-COVID War levels.
Push Back
Google, Wells Fargo, and other major employers have pushed back return dates into 2022, assuming the Delta virus will be tamed by then. We reported these developments in “Amazon Pushes Back Return for Its Corporate Workers.” (10 Aug 2021) and “Facebook Announces Delay for Return of U.S. Employees to Their Offices to 2022,” (17 Aug 2021.)
Others such as Facebook and accounting giant PricewaterhouseCoopers have opted to allow employees to work mostly or entirely at home.
TREND FORECAST: We see no reason to change our long-standing forecast, made in “New York Office Vacancies Set Record” (13 Jul 2021) and elsewhere that the commuter lifestyle and economy will take many years to return to its pre-COVID size or strength.
More workers are working at home at least one or two days a week, some full-time. That leaves fewer commuters to buy lunch, get a haircut, pick up an anniversary gift, or do other shopping or errands near their centralized offices.
Also, mask mandates and requirements for vaccine passports for people entering office buildings will further reduce the number of workers willing to return to central offices.
As a result, more businesses will remain closed, or close in the months ahead. Office real estate rents and values will decrease, and cities will collect less in property taxes, either reducing services to residents or raising taxes or fees in other areas to make up the shortfall.