The Shift Towards In-Person Work: What It Means for Commercial Real Estate
A significant shift is taking place in the world of work, with in-person attendance on the rise, particularly in major urban centers. New data suggests that the remote work trend that dominated during the pandemic is losing steam, with many employees returning to physical offices.
New York City Leads the Way
According to Placer.ai, which tracks building traffic using cellphone data, New York City is leading the nation in office visits, with October occupancy reaching 86.2% of pre-pandemic levels. Miami follows closely at 82.6%. This resurgence in in-person work is driven by a combination of factors, including employer pressure and a desire for human connection.
Employer Pressure Plays a Key Role
Major companies such as Dell, Goldman Sachs, Walmart, and UPS are cracking down on remote work, with some requiring employees to return to the office full-time. This trend has drawn positive reactions from real estate industry leaders, who see it as a welcome return to normalcy for office spaces.
Prime Office Towers Thriving
While older and less desirable buildings may still face challenges, prime office towers in areas like Sixth and Park Avenues, Hudson Yards, and the World Trade Center are thriving. This is evident to anyone who works, lives, or shops in these neighborhoods. The rise in Class A leasing is evidenced by the trend of employers pushing for employees to work in the office four to five days per week.
Investing in Commercial Real Estate
Commercial real estate has historically outperformed the stock market, and with the current trend towards in-person work, it may be an attractive option for investors. Platforms like Arrived Home’s Private Credit Fund offer access to a pool of short-term loans backed by residential real estate, with a minimum investment of only $100.
A Nuanced National Landscape
While cities like New York experience a robust return to physical offices, others like San Francisco maintain a stronger preference for remote arrangements. The evolution of this trend will likely depend on local economic conditions, workplace culture, and ongoing negotiations between employers and employees. As the landscape continues to shift, it’s essential to stay informed and adapt to the changing needs of the workforce.
Leave a Reply