Nationwide office visits in March were at some of the highest levels since the onset of the pandemic, according to a new report that coincides with fresh data indicating the vast majority of office landlords are seeing more lease renewals.
March office visits were down just 32.7% compared to March 2019, according to a new Placer.ai report. Only August 2023, which included two more working days than March, and October 2023 featured higher visitation rates, with 31% and 32.2% drop-offs from the March 2019 baseline, respectively.
Miami and New York retained leads in office visit recovery, with respective visit gaps of 14.1% and 17.2% compared to the baseline. The national visit gap year-over-year dropped slightly, from a 36.3% decline in March 2023 to a 32.7% drop in March 2024.
A slight uptick in workers returning to offices pairs with what landlords are experiencing as they engage in leasing activity. 82% of landlords are already seeing the length of renewals increasing or holding steady, according to a 2024 VTS Global Landlord report.
Landlords are shifting priorities to tenant retention, with 57% of surveyed landlords saying it was a top priority, compared to 41% who said leasing vacant space was a top priority, according to VTS. To retain tenants, 56% of surveyed landlords said they planned to enhance property management and tenant experience.
To be clear, there is still a sizable gap between current visitation patterns and pre-pandemic trends that indicate the staying power of hybrid and work-from-home models, Placer.ai noted.
San Francisco office visits were down 50.1% in March compared to a pre-pandemic baseline, trailing all other metros Placer.ai tracks in its office index. Los Angeles and Houston rounded out the bottom three in office visits, down 40.7% and 40.6%, respectively.
But one Wall Street analyst believes a CRE comeback is looming.
Jefferies Equity Research analyzed and evaluated JLL and Cushman & Wakefield data and gave both companies a buy rating, predicting that leasing and sales activity will soon increase, Seeking Alpha reports.
Jefferies' Peter Abramowitz told the outlet that Wall Street is underestimating the magnitude of a capital markets recovery in the second half of 2024 and into 2025.
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