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Tenant interest in office space has plateaued amid indications that a significant share of people returning to the office might only be going in one day a week.
The demand for office space across the country fell 1.5% in April compared to March, said VTS, whose Office Demand Index tracks in-person and digital new tenant tours of office space.
That decline, though slight, is contrary to the “seasonal norm” — usually demand increases in April, VTS said. Demand is holding at about two-thirds of the pre-pandemic average, VTS said.
Some cities are faring better than others, with remote-friendly cities like San Francisco seeing less demand than cities where remote work is more of a challenge, like Los Angeles. But overall, the message seems to be that those in the business of office have a lot of work to do.
“To continue to recover, the core office markets with higher rates of remote-friendly tenants will need to attract more diverse tenants and be willing to adapt their spaces to meet the needs of tenants who are not planning for their employees to come back into the office full time,” VTS Chief Strategy Officer Ryan Masiello said.
Two years into the pandemic, it seems many workers are getting by with less time spent in the office.
Almost half of office visits in 2022 to date were just once a week, Bloomberg reported Tuesday, citing workplace occupancy data company Basking.io, which aggregates WiFi data from 100 offices of seven organizations across a variety of industries.
In the four months prior to the pandemic, once-a-week office visits made up about 21% of all office visits, Bloomberg reported. Now, that’s roughly the share of office visits that are four or five days a week.
Slumps in demand and actual office usage come as a record number of standard leases are set to expire this year. A record amount of sublease space — 208.6M SF — was on the market in the first quarter of the year, according to Colliers. The number surpassed the 2009 high of 143.3M SF.
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