Employees are headed back to the office. After the pandemic caused many companies to encourage work-from-home policies for office workers, real estate indicators signal a reversal. As they return, companies want more space.
As of February, office occupancy continued to increase, with 84% of 390 metro areas seeing a rise, according to CoStar data. Since the third quarter of 2021, 30 million square feet of office space has been absorbed, which is on par with prepandemic levels, the National Association of REALTORS® reports.
Still, vacancies remain. About 100 million square feet of office space nationwide have been vacant since the start of the pandemic in the U.S. in 2020. Gay Cororaton, an NAR research economist, predicts that reabsorbing that office space could take through the end of 2024.
Over the past year, office occupancy gains were highest in Boston. On the other hand, New York, Chicago, and Washington, D.C., continue to see high vacancies.
“Occupancy is increasing in major tech metro areas,” Cororaton says on the blog. “The rising occupancy in these tech metro areas indicate that tech companies are contributing to the demand for office space, even as nationally, 45% of mathematical and computer workers work from home for at last some part of the time.”