Will we ever go back to the office again full-time? It’s a question every office worker has contemplated off and on throughout the pandemic era—and many CEOs have vented their spleen about. No less a figure than Jamie Dimon said that remote work “doesn’t work,” while Elon Musk, who became and largely remained the world’s richest man during the pandemic, said it leads to workers who just “pretend” to do their jobs.
Over the past two years, property management and security firm Kastle Systems has emerged as the definitive source of data for how reluctant workers are to go back to their cubicles. Now Coins2Day is providing data from the security company, which tracks key card swipes nationwide. In June, the song largely remains the same and the glass has remained half-empty—or half-full, depending on your stance.
For the week ending June 28, office occupancy in the 10 largest metro areas nationwide averaged a shade under 50%—just 49.8% of workers were back in offices on any given day. That’s the same as last week, and just 0.1% higher than the week ending June 14.
Kastle’s average office occupancy data has been steadily ticking upward from 2020 lows, but has yet to exceed 50.4%, the high it reached the week of Jan. 23, 2023. The fact that occupancy continues—in June 2023—to hover just below that high suggests that a long-heralded return en masse is unlikely to materialize.
‘You can’t put the genie back in the bottle’
The big-name Coins2Day 500 companies, like Google and Salesforce, that have made stab after stab at reinstating in-person work “pull some weight” in the return-to-office battle, Scott Bonneau, Indeed’s vice president of global talent attraction and HR analytics, said last year. But a five-day in-person week is not likely to exist again: “You can’t put the genie back in the bottle.”
Economists looking at the commercial real estate landscape would say something similar. In a paper published last year, New York University and Columbia University researchers estimated that New York City office values will drop 44% by 2029. Dubbing it a “real estate apocalypse,” the researchers said the prolonged impact of remote work will incur a country-wide $500 billion “value destruction.” In other words, there’s a lot of money riding on the Kastle Systems data.
All told, bosses should consider 49.8% a success; we’re unlikely to ever exceed 60% occupancy, Kastle Systems Chairman Mark Ein told Coins2Day’s Trey Williams in December 2022.
“I do think there will be a ceiling for workplace attendance, because I think the sorts of firms that work in buildings with Kastle Systems are going to embrace at least some form of hybrid work,” Jose Maria Barrero, one of the economics professors behind WFH Research, told Coins2Day in February. “I don’t expect everyone to be in [the office] most of the time, and the banner moment to return has probably already passed. I would’ve thought last fall or last spring, some time like that.”
Most companies surveyed by architecture firm Unispace said they’ve mandated office returns for their workers, but almost half said they’re now seeing more attrition than they expected. Almost 30% of those companies admitted they’re struggling to recruit new workers, which probably isn’t a coincidence.
Now, let’s take a look at some of the cities that are winning—and losing—the remote work wars.
New York and San Francisco
Kastle’s data extends only to the U.S.’s 10 largest metro areas: Washington, D.C., New York, Philadelphia, San Francisco, San Jose, Houston, Dallas, Austin, Chicago, and Los Angeles. It doesn’t account for cities in Florida like Miami and Tampa, which have been major Sunbelt hot spots since the pandemic started.
It does offer valuable snapshots of New York and San Francisco, though—two “superstar cities” that won the economy of the 2000s and 2010s but were highly vulnerable to the shock of the COVID-19 pandemic.
In New York, last week’s occupancy figure dropped to 49.1% from 50% a week earlier. San Francisco saw a modest bump over the same span, to 46.5% from 45.4%. Remote work is brutalizing both cities’ economies. According to a Bloomberg study from earlier this year, the average worker currently spends $4,661 less per year on meals, shopping, and entertainment near New York’s business district, and $3,040 less in San Francisco, compared to pre-pandemic. Many leaders in those cities have begun to lose hope that an office boomerang is ever going to come; both San Francisco Mayor London Breed and New York City Mayor Eric Adams have introduced legislation to more easily convert vacant office buildings into desperately needed housing.
The lowest occupancy, though, was in the heart of Silicon Valley. San Jose–Santa Clara–Sunnyvale, home to many Silicon Valley companies including Google, saw occupancy of just 39.1%. Meta and Salesforce—two Silicon stalwarts—have been desperately trying to order its employees back in, to much discontent. Other Bay Area giants, like GitLab and Airbnb, have instead opted to appeal to many workers’ demands and go fully remote on a permanent basis.
Houston and other hotspots
The metro area with the most in-office attendees last week was Houston, which saw 61.2% occupancy. Austin stood just behind at 59.4%, followed by Dallas at 53.7%. Perhaps that’s more a bellwether than anything. The state of Texas—Houston in particular—has been winning the Coins2Day 500 headquarters race.
For two consecutive years, the Lone Star State has hosted the most Coins2Day 500 companies, which total $2.6 trillion in revenue and generate $226.5 billion in profit. Houston is considered the world’s energy capital, Coins2Day’s Paolo Confino wrote earlier this month, and possesses 17 of Texas’s energy companies, including Phillips 66, which is worth $175.7 billion. Plus, Tesla and SpaceX’s bombastic CEO Elon Musk moved himself and his companies to Austin in 2020, leaving California behind.
Kastle has been posting weekly occupancy data since February 2020, and if last year’s numbers are any indication, this week’s 49.8% figure is likely to drop between five and 10 percentage points as the summer goes on. From there, it will probably tick back up modestly, but it’s unlikely to rise far beyond 50% anytime soon.
“It goes in fits and starts,” Ein, the Kastle chairman, said. “[Office occupancy] has been on a steady rise since the beginning of [2022]. But there will be a natural ceiling to it. We’re never really going to get to 100%.”
Coins2Day will continue to provide weekly updates on Kastle’s latest data.
