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The Placer.ai Nationwide Office Building Index: The office building index analyzes foot traffic data from 800 office buildings across the country. It only includes commercial office buildings, and commercial office buildings on the first floor (like an office building that might include a national coffee chain on the ground floor). It does NOT include mixed-use buildings that are both residential and commercial.
Return-to-office mandates continue to be the talk of the town. Earlier this month, the White House called on federal agencies to “aggressively” implement on-site work policies – and Google announced a special $99 deal for employees who choose to stay on campus to avoid their commutes. Even Zoom of all companies (ahem) jumped on the in-person bandwagon, calling workers back to the office for the first time since COVID.
So with summer in full gear, we checked in with our Office Building Index. Did the signs of accelerated recovery we noted last month persist into July? And what differences can be observed between cities?
Two Steps Forward, One Step Back
On a nationwide level, return-to-office mandates appear to be slowly but surely moving the needle. Visits to office buildings in July 2023 were 0.8% lower than they were in June – but still higher than they’ve been during any other month since the pandemic. At the same time, July office foot traffic remained 37.0% below 2019 levels, indicating the continued strength of the hybrid model.
San Francisco in for the Year-Over-Year Win
Regionally, Washington, D.C. continued to lead in overall office recovery, with the smallest year-over-four-year (Yo4Y) visit gap of any analyzed city – just 22.4% in July 2023. But San Francisco, where return-to-office has been particularly sluggish, saw the greatest year-over-year (YoY) jump in visits. While San Francisco office foot traffic dipped slightly in July 2023 compared to the month before, it remained higher than it’s been at any other time since COVID. Other cities too – including New York, Denver, Boston, and Chicago – saw the most office visits in July 2023 that they’ve seen since before the pandemic.
Looking Ahead
But despite continued signs of accelerated recovery, the future still seems to be hybrid. Indeed, as if we needed additional reasons to bet on the staying power of hybrid work, WFH Research’s new study showing that fully remote work harms productivity – but that hybrid arrangements don’t – seems to be a clincher. The research, which generated plenty of media buzz, showed what we all know to be true: People communicate better in person and need human interaction to thrive. But that doesn’t mean they need to be in the office five days a week. And working from home part of the time can enhance employee satisfaction – while saving critical time and money.
The study concluded that WFH, in some configuration, is here to stay. And while the recent push by many companies to get workers back to the office appears to have led to an increase in office visits, location intelligence continues to highlight the robustness of the hybrid model.
For more data-driven real estate insights, visit Placer.ai.
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