Office Occupancy Hits New Pandemic-Era High

Despite the lingering effects of Thanksgiving dinners across the nation, more workers returned to office buildings in the first week of December than at any point in the last 18 months.

Average office building occupancy across the 10 largest office markets rose to 40.6% on Dec. 1, 8.1% higher than the post-holiday week last year, according to Kastle Systems, which tracks electronic keycard, fob and building access data.

Texas and California continue to be at the extremes in office return: Austin and Houston, at 59.3% and 54.9% of pre-pandemic levels, respectively, have the most heavily trafficked office buildings, while San Francisco saw occupancy hit a pandemic high-water mark of 28.3%.

While the coronavirus's delta variant continues to spread and send cases rising nationally, fresh concerns have arisen over the omicron variant, with early reports suggesting the new variant is more contagious and less deterred by vaccines, although possibly less severe. Nineteen U.S. states have thus far reported cases of people affected by omicron.

The average office occupancy in Kastle's 10-city barometer has been steadily increasing since September, when 33.6% of employees were back in the office. The legal industry has led the way in returning to the office, with law firms on average 56.3% occupied nationally.

While patrons have been filling up restaurants and fans have been crowding sports stadiums and concert halls, the return to the office has lagged, Kastle Chairman Mark Ein said. That dynamic has much to do with the C-suite, whose members feel a responsibility toward their employees and are reluctant to rush a return to the office.

Besides, the jobs housed in office buildings can often still be done from home, as the pandemic has proved.

“There is no workaround for a restaurant being in business if people aren't coming or a sports team being in business if people aren't coming,” Ein said. 

With more than 60% of the U.S. either partially or fully vaccinated, many workers are expressing a desire to come back to offices. Half of 1,000 full-time workers surveyed by Workhuman, a cloud-based employee-management firm, said they were either excited or happy to return to the office, Fortune reported. Fifteen percent said they were anxious about returning to the office. More than 80% of workers had already visited the office once in the past month, according to the survey, which was conducted the week of Dec. 6.

Coronavirus variants — and talent shortages — have kept many large companies cautious about requiring workers to report back to the office. Google, Wells Fargo, Ford Motor Co. and ride-sharing operator Lyft all recently announced delays of returning workers to the office until next year.

With many companies establishing permanent hybrid work models, Ein said he doubts offices will fill up on a daily basis at numbers seen prior to the pandemic any time soon. But, he said, he does expect a surge come January, especially now that more people have fewer health concerns about Covid.

“At this point, what companies are dealing with more are employees who say, 'I just want the flexibility to work from home,'” he said. 

UPDATE, DEC. 9, 6:40 P.M. ET: This story has been updated with commentary from Kastle Systems Chairman Mark Ein.