The Great Delay’s Impact On Office Leasing
Labor Day came and went, and the anticipated mass return to the office has yet to occur.
New Covid-19 cases started surging in July and have continued to do so past Labor Day weekend, leading companies to continuously delay their plans to bring employees back into the workspace
“Many employers want their employees to be in the office but at the same time, employees are pushing back for several reasons,” said Amber Gibson, vice president at Stream Realty Partners. “Most notably, they either have genuine fears for their health and safety or want the ability to work from home permanently because they have been doing so for the last 18 months.”
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What does this mean for the office leasing industry? According to Kastle Systems’ back-to-work barometer during the week of August 30, there is a 33.1% 10-city average occupancy rate.
Although this data comes from just Kastle customers, other findings have indicated similar occupancy levels.
Even more, Vestian Chairman Michael Silver believes it will likely take a year or more for occupancy to fully recover, especially in major metro areas. Specifically, Silver predicts that occupancy rates will sit at 70% to 80% by the end of 2022.
This continued postponement has forced landlords and developers to adjust their revenue projections, and brace themselves for short-term leases in the near future.
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