Office Occupancy Crept Up Last Week To New Post-2020 High

A slight increase last week pushed the office occupancy to its highest level since March 2020, according to the latest Kastle Back-to-Work Barometer.

Office occupancy in 10 major U.S. markets for the seven days ending July 20 came in at 44.7%, an uptick of 0.6 percentage points from the week before. That slight increase was enough to push the number to the highest it has been since before the pandemic.

Occupancy in one market, metro Dallas, dropped for the week. Austin has the highest occupancy at 59.1%, while metro San Jose has the lowest, at 36.5%.

To measure occupancy, Kastle tracks access activity data at 2,600 buildings in 10 markets that use its technology.

Demand for office space in June was nearly two-thirds of the pre-pandemic total, according to a VTS Office Demand Index analysis, though demand was actually down compared with May. 

VTS tracks new tenant tour requirements, both in-person and virtual, of office properties in core U.S. markets, and the company says its index is a leading indicator of office space demand.

Nationally, demand fell four points from 67 in May to 63 in June (100 would indicate pre-pandemic occupancies). That rate of decline is on-par with seasonal norms, however, and doesn't represent a retreat from office occupancy, VTS reports.

Boston saw the greatest dip in June, with demand for non-life-sciences office space falling 23% from May. In New York City, demand for office space was also down, but it is now above two-thirds of its pre-pandemic normal.