The pandemic single-handedly dismantled what downtown cities in the U.S. look like.
Prior to the pandemic, office occupancy sat at 95%, but that number has tumbled to around 47% as employees become increasingly remote and distributed. Because less workers are coming into cities for work, offices are losing money while surrounding businesses struggle to stay afloat.
For instance, Meta recently canceled its least agreement for three offices in Hudson Yards, a grim sign from the once reliable occupant.
The logical solution would be to convert empty offices into residential areas in an effort to combat the affordability crisis, but companies are bullish about workers returning to their main offices.
Even in cities where office exits were not nearly as rampant, such as Austin, activity is still far below pre-pandemic levels, indicating that the impact of hybrid and remote work could be here to stay.
Some experts are sounding the alarms, with New York University Stern School of Business Professor Arpit Gupta stating that lease cancellations are akin to an office “apocalypse.”
All factors considered paints a foreboding picture, where downtowns may never be the business hubs they once were and force an evolution of central social districts.
This means converting poor-performing real estate into something with purpose, or simply reimagining offices into multiuse spaces that incorporate basic needs, such as flexible workspaces, grocery stores, housing and more.