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Has The COVID-19 Pandemic Affected Demand For Office Space?

from the Atlanta Fed
Last July, our Atlanta Fed colleagues concluded that the COVID-19 pandemic would not decrease demand for commercial real estate (here). As the COVID-19 pandemic passes the one-year mark, have expectations on what a return to the workplace looks like changed for businesses and their employees? Many firms continue to allow employees to work from home (here and here). Anecdotes suggest that many are reimagining their office culture as they scrutinize empty or underutilized office space in an effort to reduce structural costs. Has this also resulted in a significant shift in demand for office space?
To understand how office market performance fundamentals have changed since the COVID-19 pandemic began, we examine office-using employment, vacancy rate, and rental rate trends across the 10 cities with the highest office space square footage stock. We hypothesize that markets with higher office space inventories likely have more office workers and may expe ....

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