Changing Workplace Dynamics: Remote Work Trends Threaten Global Office Real Estate Markets

Let me slide in some valuable data on workplace dynamics.

From the Real Estate Board of New York, office visitation rates in Manhattan are 73% of where they were in 2019… on Wednesdays.      Fridays are at just 43% of their 2019 levels.     The report uses data from Placer.ai that tracks employee visits from a sample of 50 Manhattan office buildings.

Office attendance has stabilized at 30% below pre-Covid norms, and only 37% of workers are going into the office every day, McKinsey Global Institute said in a report last Thursday.   But more importantly, that report outlines how Remote work risks wiping $800 billion from the value of office buildings in major cities worldwide by 2030 as the post-pandemic trend pushes up office vacancy rates and drives down rents.  

Hybrid work here to stay, blah blah blah.    Today I want to focus on that long-term effect – the risk of office building change.   2030 sounds like a long way from now.    It’s not.   Consider a structural shift in the makeup of cities.   Which business that you serve will be impacted?  Retail?   Services?     Janitorial staff, waste management, electrical usage… and, yes, information technology.  The list is pretty significant to consider this structural shift.   I’m not saying I have the solution – but we care because change is coming in that space and those who believe it now will be well served.