Restaurants and gymnasiums are full, why are U.S. office buildings still empty

American restaurants and stadiums are full, why are office buildings still empty?

At the just-concluded super bowl final, the annual sports event, more than 70,000 spectators filled the SoFi Stadium in Los Angeles. Fans were asked to show proof of vaccination or negative COVID-19 testing and to wear masks when not eating, but the stadium was still packed.

As COVID-19 infection rates and hospitalization rates have declined, restaurants and airports across the country have also begun to get lively. On Friday, according to the Transportation Security Administration (TSA), the number of people who passed through airport security on the same day exceeded the same period in 2019, nearly 2 million.

However, most people who continue to work from home because of TheOmexron strain still haven't returned to the office. According to US media reports, according to security firm Kastle Systems' monitoring of office building entrances and exits, in 10 major cities in the United States, an average of only 33% of the workforce returned to the office building in the first week of February.

But the good news is that the number is picking up. Irene Tunkel, chief strategist of the U.S. asset strategy department of investment consulting firm BCAResearch, said in an interview with first financial reporters a few days ago that economic life is recovering as the impact of the Aumechjong strain decreases. "For example, holiday travel in the United States has surpassed its pre-pandemic peak, which means that the United States is getting closer and closer to the time when white-collar workers return to the office." She said.

Why people are reluctant to return to the office

According to Kastle Systems' analysis of industry statistics, in the first week of February, the number of visitors returning to cinema was 58 percent before the pandemic, while restaurants were three-quarters fuller than before the pandemic, and air travel also recovered to about 80 percent. Attendance at the National Basketball Association (NBA) game was 93 percent as of February 2020.

And while some states have announced plans to remove mask orders in indoor settings such as schools and office buildings, remote work remains a more common option. According to Kastle Systems, earlier this year, a large number of companies chose to let employees work from home because of the health risks posed by the Omilon strain. While the percentage of employees returning to the office is gradually picking up from 23 percent in the first week of January, the figure is still well below the high of 41 percent in the first week of December last year. At that time, the Aomikron strain had not yet brought a full impact.

The disagreement about enthusiasm for different indoor activities suggests that health risks are not the main reason why employees are reluctant to return to the office. On the one hand, after nearly two years of working from home, surveys show that most employees are tired of drawbacks such as the long commute required to get to work. Employers are not insisting on employees returning because they fear that such a labor shortage will drive employees away.

Studies have shown that many workers have the same or even higher productivity when working remotely. Brian Kropp, head of human resources research at Consulting and Research firm Gartner, said: "Employers feel that remote work is not perfect, but the results are not bad, and there is no urgency to change. ”

In addition, the recurrence of the epidemic has also hindered the company's plan to call employees back to the office. Both the West Coast-based tech giants and the New York-based financial firms have abandoned explicit "return" dates in favor of more nuanced plans, such as expanding or shrinking office use based on public health conditions.

"Whether to force employees to vaccinate" has also become a headache for some companies. Earlier this year, the Supreme Court rejected the Biden administration's executive order to force employees at big companies to be vaccinated or tested for the virus. According to a Gartner survey, 45 percent of large companies plan to undergo compulsory vaccinations before the Supreme Court makes a decision, and about 55 percent choose testing. After the executive order was rejected, the two figures were reduced to 33 per cent and 50 per cent, respectively. Another in five companies said there would be no demands.

Klopp said many companies have not announced their vaccination plans due to political uncertainty. "They don't know if the Biden administration will push for mandatory vaccinations again," he said. ”

Now, as the effects of the Aumechjong strain fade, some large companies have announced new dates of return. Goldman Sachs and Jefferies have taken the lead in restarting their offices, and American Express said this month that employees in the New York office will be on track to work in March. Most of Wells Fargo's employees will return to the office on March 14. Morgan Stanley is also encouraging employees to work offline this month. Citigroup requires Employees in the New York City area to enter the company at least twice a week. On the tech side, Microsoft will reopen its Washington and Bay Area offices to employees and visitors on Feb. 28. Meta plans to reopen its offices at the end of March, and Apple, Google and other big tech giants have yet to announce new plans.

The number of commercial properties under construction is decreasing

With a large number of white-collar workers no longer commuting, businesses such as bars, dry cleaners and food trucks that rely on business districts to survive are struggling to survive. In the absence of many major customers in the past two years, some businesses have gone out of business permanently.

In Manhattan, New York, about 10 to 15 customers now visit a barbershop near Grand Central Terminal every day, according to US media reports. Shopkeeper Nikita Shimunov, who said there were an average of 50 to 60 people a day before the pandemic, has reduced the number of employees from 5 to 3 and is considering closing the door altogether.

The restaurant industry in the business district has also been hit hard. According to the Massachusetts Restaurant Association, most of the 3,400 restaurants in the state that haven't reopened since March 2020 are located in downtown areas that rely on white-collar workers.

On the other hand, according to the office market report of real estate investment firm JLL for the fourth quarter of 2021, the area of office space built in the United States is decreasing. By the end of 2021, the new office space under construction across the country is less than 100 million square feet (about 9.29 million square meters), the smallest since 2015. In 2021, 55.4 million square feet (about 5.14 million square meters) of office space were delivered across the United States.

According to JLL' report, in the fourth quarter of 2021, only 11 buildings in the U.S. broke ground on office space of 2.4 million square feet (about 220,000 square meters), most of which were on-demand developments or projects that already had major tenant contracts. Among the major markets tracked by JLL, New York had the most projects under construction at the end of 2021, with 20.8 million square feet (about 1.93 million square meters). Boston was followed by 6.1 million square feet (about 560,000 square meters), and then Silicon Valley, with 5.8 million square feet (about 530,000 square meters).