The Worst Is Over For Office, Predicts JLL's Ulbrich

During a recent interview on the CNBC program Last Call, JLL CEO Christian Ulbrich took an optimistic tone about the U.S. office sector, asserting that occupancy will continue to grow.

“Employment is growing in the U.S., and so [while] some companies have declined their footprint around employees, others are already increasing it again,” Ulbrich said. “So I think we have seen the worst behind us already.”

Employment surprised on the upside in May, adding 339,000 jobs nationwide, according to the Bureau of Labor Statistics, with gains occurring in professional and business services, government and healthcare, among other sectors.

Ulbrich noted that some parts of the country, such as cities in Texas, have seen more workers returning to the office more of the time, while other places — San Francisco and San Jose, for example — are seeing fewer workers in the office. Also, in markets in Europe and Asia, more workers have returned than many U.S. markets.

Part of that difference is commute times, Ulbrich said, which tend to be longer in the U.S., and now less acceptable. But there are also other cultural factors. In Asia, apartments tend to be smaller than in the U.S., and so work-from-home never was considered a permanent change for many workers in China or Japan.

JLL's hometown of Chicago is seeing office occupancies rise after a longer-than-expected decline, Ulbrich said.

“We are at about 65% pre-pandemic level here in Chicago, which means that it's at the top among cities now, which is quite a remarkable development over the last couple of months,” Ulbrich said.

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Related Topics: Christian Ulbrich , JLL , Return to office
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