WJR Business Beat: Commercial Offices – Are They a Thing of the Past? (Episode 389)

Good morning, Paul! It’s no secret now that many companies are struggling to bring employees back to the office environment. As Carol Ryan reports in the Wall Street Journal, workers simply have embraced the idea of working from home now, and they aren’t going to give that up anytime soon. Worse yet for employers and commercial landlords, those expensive offices are simply underutilized now, many sitting empty some, if not most, of the time. Making matters worse, it’s a market in favor of employees. Now they have all the leverage in this hot job market. And if they’re told that they’re expected to be in the office, they can just go next door to work for the competition. Employers know it. And so do employees. So employers are forced to make accommodations, whether it be a pure work-from-home scenario or some kind of hybrid part-time in the office and part-time at home. Average occupancy rate in the U.S. is 42% now, according to Castle Systems. Latest back to work. Expensive cities like San Francisco and New York are lagging behind those numbers, perhaps because some employees have moved to more affordable places or are reluctant to return to long daily commutes. Austin has the highest rate of occupancy nationwide these days. The average office vacancy rate will hit an almost three decade high of 17% in the U.S., according to CBRS. So what to do with all those empty offices? Landlords are now being forced to consider converting these office spaces into entirely new uses, such as warehouses or even apartments or condominiums. And so what does the future hold? It likely holds some sort of hybrid work from home, work from the office combination. Just another way business has been changed forever Paul, by this pandemic. I’m Jeff Sloan, founder and CEO of startupnation.com, and that’s today’s Business Beat on the Great Voice to the Great Lakes, WJR.