The increase in COVID-19 vaccinations and easing of mask restrictions has not been enough to encourage most employees to return to their offices yet, The Wall Street Journal reports. The hesitation has prevented office towers and neighboring businesses from fully taking part in the country’s economic recovery.
Fewer than three out of 10 white-collar employees were working at their offices on average in 10 major metro areas including New York, Los Angeles, Washington, D.C. and San Francisco, according to security company Kastle Systems. The firm monitors office building access card swipes in more than 2,500 properties across the U.S.
The number of employees coming back to the office has slowly increased since the COVID-19 vaccines started to be administered in the U.S. The reason for the slow return varies—some employees have resisted their employers’ request to return. Other businesses are waiting until the fall to reopen their offices. Their thought is the COVID-19 vaccine will be more widespread and children will be back in school.
“(Office workers) are not coming back in force yet,” Mark Ein, Kastle’s chairman told The Wall Street Journal. “Habits that have been formed over the last year and a half are going to take a while to break.”
Office CRE at a reopening disadvantage
Currently, offices have had more difficulty filling up compared to other commercial real estate properties, according to The Wall Street Journal. Restaurants are getting crowded again, airline flights are full and sports arenas are reaching full capacity. Meanwhile, office buildings have remained mostly empty even as the COVID-19 pandemic subsides. Workers’ hesitation to return to their offices has also delayed small businesses reopening in empty business districts.
Employees’ preference to work remotely is one of the key reasons why businesses have struggled to get workers to return. Many want to work from home permanently according to surveys, while others are pushing back when their employers announce their reopening plans. Health concerns remain another reason people don’t want to go back to their office. There are people who don’t want to be vaccinated and many companies are still trying to figure out their vaccination policy.
Businesses’ office reopening plans
San Francisco-based Salesforce.com and JP Morgan Chase in New York have reopened their offices to employees who’ve been working remotely, The Wall Street Journal reports. Less than 21% of workers in those cities are back at their offices, according to Kastle, however. Companies remain optimistic that more will return in September when schools are reopened and summer travel ends. Business group Partnership for New York City recently conducted a survey that revealed 62% of employees would be back in their offices in September. That’s an increase from 45% in March.
In the meantime, city office buildings have not seen a significant increase in workers returning that they assumed would occur after the COVID-19 health threats started to subside. Stores and restaurants that count on office workers shopping and eating at their establishments are wondering “where are all of the office workers,” according to James Mettham, executive director of New York City’s Flatiron-23rd Street business improvement district. The area was used to seeing 100,000 people commute there every day before the pandemic. That number is significantly less today.
“Everyone knows full well that unless we’re getting a much bigger chunk of those 100,000 people, it’s going to be difficult to continue,” Mettham told The Wall Street Journal.
Geography will play a part in offices reopening
The return to the office numbers is on the lower side nationally but varies in different parts of the country. For example, areas in Texas like Austin, Dallas and Houston have seen a return rate in the high 40% range—twice what New York and San Francisco have seen, according to Kastle. Texas’ less dense areas and less reliance on public transportation are partly why the state has seen larger return to the office figures.
“Part of the difference is ‘Texas swagger,’” Oliver Carr III, chief executive of Carr Properties, which owns about 4.7 million square feet of office space, told The Wall Street Journal. “(The sentiment) is, ‘Let’s get back quick, and get back to normal,’” he said.
Joe Dyton can be reached at joed@fifthgenmedia.com.
