Cities’ desire for workers to return to the office

The continuous argument about whether it’s better to work in an office setting or remotely ignores a crucial aspect that could have severe effects for major cities like New York, Chicago, and San Francisco. The commercial real estate industry could be facing major difficulties.

Landlords and businesses that spent millions buying, leasing, and renovating office buildings to house and draw workers are in the red when there are empty offices to fill. The possibility of a downturn is influenced by rising interest rates, excess supply, and diminishing demand. According to the survey, the pandemic has had a substantial effect on the commercial real estate sector, with many companies finding it difficult to stay afloat and many workers opting to work from home.

The office vacancy rate in San Francisco reached a record high of 29.4% in the first quarter, which is around eight times higher than it was before the epidemic, according to a New York Times report. According to Commercial Observer, leasing in New York would decrease by 43% in the fourth quarter of 2022 compared to the same period in 2021.