National Office Attendance Rises With Slow but Steady Gains

Article originally posted on CoStar on March 11, 2024

It hasn’t been quick or easy to get office attendance rates closer to what they were prior to the pandemic, but workplace foot traffic is on a slow but steady climb.

As more companies add stricter in-person mandates and adjust to longer-term flexible work policies, attendance rates for days in the middle of the week have jumped 27% from 2022, data firm Placer.ai’s National Office Index shows. The data analyzed foot traffic among roughly 1,000 commercial office buildings in the United States, excluding buildings that are both residential and commercial.

While foot traffic on Mondays and Fridays — popular work-from-home days — is down as much as 49% from the years leading up to the pandemic, several elements in the return-to-office shift are proving to be a benefit for a property type struggling with record-high vacancy rates.

For starters, companies in industries including finance, insurance and real estate are propelling attendance rates in cities with larger shares of those types of employers because they tend to require more in-person workdays. New York, Dallas and Miami, cities with a high concentration of workers in those fields, have led the national office recovery push as attendance rates have come close to nearly 80% of their pre-pandemic levels, according to the Placer.ai data.

What’s more, young professionals — especially affluent, educated ones — prefer to commute to an office more regularly to avoid missing out on mentoring, professional development and other social opportunities. Attendance rates for that demographic have exceeded those reported before the pandemic, according to Placer.ai, with cities such as San Francisco posting the largest jump in its share of “educated urbanites.”

To be clear, the office market still has a long way to go before it regains its balance. The national vacancy rate has climbed to a record high of nearly 14%, according to CoStar data, a figure propelled by a greater portion of tenants looking to offload space rather than take it on.