The beginning of 2021 was supposed to mark the Great Return to the Office.
However, due to a spike in Covid cases, January 2022 is bound to feel very similar to January 2021.
As a result, the value of office REITs could be facing a rough road ahead, particularly as companies delay their office return and people continue to work from home.
In November, workers operating remotely due to the pandemic fell to 11.3% and government figures showed that 13% of workers had work from home options. This still indicates upwards of one-quarter of professionals can do their job from home at least some of the time.
While many companies are again postponing their return to the workplace, some are still opening their offices for those who want to come in.
For instance, Lyft is opening its offices by February of next year, but stated that returning to the office will be optional for the entire year.
“With the omicron variant of COVID-19, the renewed concern is that companies will delay their returns to office work again, and many will eventually get tired of the constant delays and simply pull the plug,” said Matthew Frankel, a contributing analyst at The Motley Fool. “For example, New York City office REIT Empire State Realty Trust has seen its stock price drop by about 10% since the new variant started making headlines, and it’s not surprising given the uncertainty.”