Through the cloud of uncertainty that has dawned over the office market is a single ray of certainty as city office leasing activity ramps up through Q2. Despite signs of a surging Delta variant, downtowns are still holding their appeal for office-use companies due to locality, ‘youthification,’ and a sudden urge to return to an office environment.
Recent data from the Bureau of Labor Statistics will show that remote work is declining considering only 25% of professional workers and managers worked remotely in the month of July. Eden Workplace calculated that 85% of office workers are actually looking forward to returning to the office. There is a slow-drip return to the office sector and it’s motivating companies to lock-in on leases ahead of the game.
“Even though the COVID-19 pandemic presented many challenges to cities, these markets are incredibly resilient and always seem to rebound after a crisis. For example, migration to New York City is growing twice as fast now as in 2019, and that is translating to more workers returning to the office.”Wealth Management
Gen-Z & Youthification
According to a survey conducted by the New York Times, many companies are actually planning to bring their employees back even despite tech giant Apple going otherwise. We already talked about the reversal of urban flight, and it is in-fact the versatility in lifestyle that places like NYC, LA, and other metro markets have to offer that is making this reversal happen. Experts in the matter believe urban commercial real estate was hindered by the pandemic but it isn’t going anywhere.
Furthermore, Wealth Management reports younger demographics are sustaining the fixation on urban commercial real estate development and office lease activity. Through the process of ‘youthification,’ or an age-specific version of gentrification, cities are developing to appeal to Gen-Z, while companies seek to rejuvenate their workforce with youth.
“The Gen Z-ers who are moving to cities represent a fresh new talent pool for companies to access. This indicates that employers throughout the country will seek or remain in urban office space in order to attract and retain top talent from this demographic group.”
Which supports why big tech companies and startups were responsible for acquiring around 3.4 million square feet of office space during Q2 2021; A mark that vastly ‘surpasses any other tenant sector in the nation.”