Office demand is sluggish in cities with higher levels of remote-work-friendly jobs.
While COVID-19 cases in the U.S. remain at relatively low levels compared to the start of 2021, the pandemic has changed the way America works, with more employees choosing to telework. This impact is still being felt in the office leasing market, as well as the way developers are thinking about building new offices, the summary is that telework, seems here to stay.
For many workers the pandemic didn't just change the way we work, it changed the way we live. Many workers have found value in remote or hybrid work and are reluctant to go back to the way life was pre-pandemic.
Three facts for the post-pandemic office market:
Builders, developers, and investors should expect a slower office market pandemic recovery in cities with a greater percentage of remote-friendly jobs and a quicker bounce back for cities with fewer remote-friendly positions, according to industry experts
Seattle, Boston, and San Francisco, which are the job markets with the most remote-friendly positions in the nation, have recovered the least from their pre-pandemic level of demand. Chicago, New York, and Los Angeles— markets with substantially less remote-friendly positions— have fared much better, according to research.
Washington, D.C., an exception to the pattern with a high rate of remote-friendly jobs and a further-along recovery, DC has a large share of government employers who may be less willing to keep remote work arrangements in place compared to employers in Boston, San Francisco, and Seattle.
As more employees head back into the office, companies will retrofit their office spaces to accommodate an increased reliance on decentralized work, such as working from home. Research finds that in the coming months and years, more office tenants will require flexible workspaces moving forward.
For developers and commercial space holders that means, changing the way you build as well as what you build. The future of office space may mean smaller HQ workspaces, co-work spaces, or combination offices that include many businesses sharing common space. Either way, BHI is up for the challenge to retrofit or build from scratch. Contact us at www.BHIbuilds.com to talk about your next project.