A 50% Office Occupancy Rate Means Trouble for US Cities

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A 50% Office Occupancy Rate Means Trouble for US Cities

24 June 2024 / Article

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More than four years after the onset of the COVID-19 pandemic, a significant and likely long-term shift in the way offices are used is taking place. As employers continue to embrace hybrid and remote work models, the decline of in-person office occupancy rates is having a major impact on US cities.

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Employees in metropolitan areas with longer commutes, higher costs of living, and concentrations of knowledge-based industries are embracing hybrid/remote work, resulting in lower in-office occupancy. The average weekly in-person office occupancy rate has stabilized at about 50%, and this has been the standard since Q4 2022.
Employers are continuing to adopt hybrid and remote work flexibility as employees have shown this is a priority for them. Especially amid a still-tight labor market, flexibility gives employers leverage in hiring and retaining staff. An estimated 69% of US companies are offering hybrid or remote flexibility to employees, up from 51% in Q1 2023.
Still, the decline in office occupancy bears significant consequences for the commercial real estate (CRE) industry and cities. Increasing vacancies are weighing on tax re

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