Looking forward to the days of crowded office buildings, full conference rooms and elevators crammed shoulder to shoulder with workers hustling to their cubicles? You’ll be waiting a long time for any of that, according to the latest research from Cushman & Wakefield.
Cushman’s Global Office Impact Study predicted that the country’s office market will struggle with the impact of COVID-19 and the current work-from-home trend for several more years.
In the study, Cushman & Wakefield writes that office leasing fundamentals won’t start to improve until 2022. And a full recovery? That won’t happen until 2025, according to the study.
This recovery timeline is similar to what the office sector saw during the Great Recession, but with a bit of a lag because of the many people who will be working from home for months.
By 2025, Cushman & Wakefield says, global office vacancy is expected to return to pre-crisis levels of about 11 percent. The company expects office rents to return to pre-crisis peak levels by this time, too.
This doesn’t mean, though, that office life is disappearing. The Cushman study says that the office will still play a key role in work. After all, there are plenty of work activities — such as collaborating, networking and brainstorming — that don’t work as well remotely.
Then there is training and mentorship. It’s hard for young workers to find mentors through Zoom meetings or while working from their basements.
“Even though the impact of work-from-home trends will slow the office market recovery, the overall growth in office-using job sectors along with many other factors – including agglomeration, culture/branding and productivity – collectively indicate that the office will continue to play an important role in the economy going forward,” said Rebecca Rockey, Global Head of Forecasting at Cushman & Wakefield.
Getting back to some semblance of normal, though, will take time. According to the report, global office vacancy will rise from 10.9 percent in the fourth quarter of 2019 to 15.6 percent in the second quarter of 2022. The report also said that about 95.8 million square feet of office space will go vacant during the next two years. If this happens, that’ll be a bigger rise in empty space than during the 2008 financial crisis, when occupants left 85 million square feet of office space empty.
