In what feels like déjà vu, office recovery may be hindered by the emerging Omicron variant of Covid-19.
Prior to knowledge of the new variant, office recovery was already seeing signs of faltering. In fact, the National Association of Realtors (NAR) found that occupancy dropped by 2 million square feet as of November compared to the third quarter of 2021.
“The factors of the ongoing pandemic, more people working from home (fully remote or hybrid) compared to the pre-pandemic level, the decline in office space per worker, and the tight job market all pose headwinds to absorbing this enormous amount of office space,” said Scholastica Cororaton, Research Economist at the NAR.
Coraraton anticipates that pandemic-related factors will keep vacancy rates at just over 10% until the end of the year. Additionally, she noted that office workers’ office usage is still four times less than pre-pandemic averages.
The research showed that while there is clear demand for office jobs, only half of office job postings are being filled due to workers being unable to move to certain regions due to high cost of living or other personal issues.
In fact, metro areas saw the biggest portion of office occupancy loss during November, with New York seeing a decrease of 31 million square feet, Los Angeles seeing a decrease of 11.5 million square feet, and San Francisco experiencing an 11 million square foot dip.
