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By Hailey Mensik • December 13, 2023 • 2 min read •
Ivy Liu
This article as first published by Digiday sibling WorkLife
The return to the office is slowing down. Office occupancy has stayed around 50% throughout this year, according to data from Kastle Systems which tracks office badge swipes. Companies now have a clearer picture of how much of their office space is actually being used.
Reportedly, about 75% of businesses plan to reduce office square footage next year based on a survey from hybrid work platform Robin, which included responses from over 500 business owners and facilities managers. This is up 30% from last year. Companies are being financially challenged to cut back on costs and are also considering what kind of spaces staff need while working in person only a few days a week.
The Robin survey also showed that about 40% of respondents said they are currently using only half of their available office space, and only 28% said they are using all of their office.
Robin CEO Micah Remley stated, “Hybrid work is truly changing the patterns of when we use space.” He also mentioned the likelihood of leases getting let go of continuing to rise.
Shadow vacancies are essentially when a space looks occupied on paper, even if it’s not actually getting utilized by the tenant. There’s concern that corporate tenants may not renew their leases in the future, leading to higher vacancy rates and taking activity away from previously vibrant city centers—which is getting more attention today as the full impacts of the pandemic become clear.
Right now, office vacancy in the U.S. is around 18% while about 80% of office space is currently occupied, said Julie Whelan, global head of occupier research at real estate firm CBRE. She also mentioned that office vacancy is expected to peak at the end of next year just below 20%.
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https://digiday.com/?p=528641