Although the office market is not out of the woods just yet, Cushman & Wakefield CEO Brett White believes a rebound could be on the horizon.
In a CNBC interview, White expressed optimism about the marketplace thanks to a growth in “transactional velocities” and market activity, which are dependent on vaccination distribution and decreased Covid-19 cases.
Last fall, Cushman & Wakefield saw its office demand fall by 30% more than it did during the Great Recession.
Although there seems to be a glimmer of hope, there is still pressure as companies reveal their commitment to cutting down their real estate footprints. For instance, JPMorgan CEO Jamie Dimon expressed that increased remote working policies will reduce the company’s need for real estate.
Additionally, while demand has grown, vacancies have also increased due to people continuing to work from home for the foreseeable future and ongoing office construction being delivered.
However, research from CBRE finds that 98% of respondents expect to return to the office by the third quarter of this year. While this is promising, it does not mean that offices will return to pre-pandemic occupancy levels.
Cushman & Wakefield believes that the three million jobs that were lost during the beginning of the pandemic will be regained by the fourth quarter of 2021. Again, while promising, traditional jobs are more likely to make up a large portion of this rebound especially with many office-based companies turning to hybrid work models.