Pandemics, like wars, change everything. The COVID-19 pandemic was no different.
But because this is our workplace trends issue, we’ll focus on two interlinked changes in the workplace landscape: remote work and the office real estate market.
Although more workers have returned to the office, it’s unlikely that those numbers will ever return to pre-pandemic levels. Goldman Sachs wrote in an Aug. 28 report that the percentage of U.S. workers working from home at least part of the week had stabilized at around 20%-25%, “below its peak of 47% at the height of the pandemic but well above the pre-pandemic average of 2.6%.”
Goldman Sachs noted that while remote work had reduced the use of office space, occupancy rates had not yet seen substantial declines because most companies are tied to long-duration leases. But those leases will eventually expire. Goldman Sachs reported that “17% of all office leases are scheduled to expire by the end of 2024, 47% between 2024-2029, and the rest after 2030.” Those expirations, the report said, will push up office vacancy rates.
Businesses, investors and everyone else will need to adapt to this new environment. “Pivoting” is not over. It’s never over.