Back to Work
Occupancy for office buildings based on an average of 10 major metro cities, including: San Francisco, Austin, Chicago, Washington D.C., San Jose, New York, Houston, Los Angeles, Dallas, and Philadelphia.
Source: Kastle.com as of December 2023
Plans to Buy in 2024
The majority of real estate agents from across Sotheby’s International Realty who responded to our survey said their clients plan to buy in 2024.
Source: Sotheby’s International Realty Luxury Outlook 2024 Agent Survey 50%
According to data from property technology and security firm Kastle Systems, whose Back to Work Barometer tracks access to offices in top U.S. metro areas, occupancy hovered around 50% in September 2023.
Empty office buildings present bigger challenges, he says. “Many projects that were purpose-built for the tech boom were delivered as shell and core only, with no interior build-outs. It’s a maximum opportunity for another build-to-suit tenant—which might be another tech company,” Jones says. “The real casualties will be tired class B and C office parks built in the 1970s and now losing tenants to class A at the same price.”
In Westchester County, outside of New York City, suburban office parks are taking a different shape in the wake of the remote-work revolution, according to Ellen Stern, associate broker, Julia B. Fee Sotheby’s International Realty in Rye, New York. “We’re seeing a lot of multiuse spaces that include businesses like fitness facilities that are a destination,” she says.
Like commuter belts around other areas, affluent Westchester is seeing a revitalization of main streets in sought-after towns like Rye, Scarsdale, Larchmont, and Bronxville. “Everything that had been available in the city is now available here,” she says. “We’re starting to mimic urban services with everything from healthful quick-service dining options to a vitamin-drip bar. That’s not particularly suburban.”
But the exodus from New York City has less to do with remote work than with simply needing more space, Stern says. “In most of the families moving here, both parents work. We have a lot of financial-services people, and they’re all back at the office. I don’t see ‘not going back to the office’ as a main driver,” she says. “Even though you’ll have more of three days in the office and two days remote, you’ll see a lot of families where one parent’s hybrid and one is fully back at work.”
Still, home offices are “an essential requirement” for homebuyers, many of whom “were taking Zoom calls in bathrooms during Covid,” Stern says. “Now, I see people taking Zoom calls on their walks.”
