Offices in America’s biggest cities are still less than half occupied, reflecting the impact of remote work despite an ongoing campaign by many employers to summon workers back to their desks.
According to a
weekly update by access control company Kastle Systems, offices across 10 cities were just 37.8 percent occupied on average as of Nov. 23. That figure was down from 48.1 percent the previous week, due to employees taking off early for Thanksgiving, but the drop was steeper than in the same period last year.
In fact, office occupancy on the Wednesday before Thanksgiving was only 24.9 percent, lower than the 33 percent recorded on the same day in 2021, suggesting that Americans worked from home throughout Thanksgiving week even more often than last year.
Kastle Systems tracks swipes of keycards and fobs, as well as access data from its app, across thousands of buildings nationwide to gauge how many people are actually going to the office. The weekly data represents an average of 10 metro areas including Chicago, Dallas, Los Angeles, New York, and Washington, D.C.
The overall office vacancy rate—a measure of how much real estate is not currently occupied by a tenant—rose to 19.1 percent nationwide in the third quarter, according to a
market report by commercial real estate brokerage JLL.
Average asking rents are just 0.4 percent below their pre-pandemic level, but effective rents have dropped by 6.2 percent, JLL reported. Effective rent measures how much revenue landlords are taking in from rental payments, minus concessions, operating expenses, and other factors.
Office investment activity is also slumping. Despite wide variation across the market, office asset prices in general have declined 15 to 30 percent from their peak valuations in the first quarter of 2021, according to JLL.
The number of people working primarily from home tripled from 2019 to 2021, rising from roughly 9 million to 27.6 million people, a
survey by the U.S. Census Bureau found. As a result, the average time spent commuting one way dropped to 25.6 minutes in 2021, two minutes shorter than in 2019.
A large percentage of American employees seem to prefer working from home, with
one study finding that U.S. workers would take an average 5.7 percent pay cut in order to telecommute. Employees, however, are divided over the necessity of forcing workers back under the fluorescent lights.
Twitter’s new owner Elon Musk decided to
end remote work arrangements when he took over the social media giant earlier this month, and Goldman Sachs CEO David Solomon
said in October that the investment bank has 65 percent of its employees in the office, not far from the 75 percent level before COVID-19 struck.
Other companies have taken a hybrid approach by asking employees to come in a few days a week, while some employers offer permanent work-from-home policies.
A
recent study of tech job postings by the nonprofit Computing Technology Industry Association found that the number of positions offering remote work options grew from 27 percent in 2021 to 34 percent during this year to date.
