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Opening the Doors: Measuring the Return to the Office

U. S. offices hit a notable milestone in January as the never-ending return to work saga continues: for the first time since 2019, weekly average occupancy exceeded 50 percent of pre-pandemic levels according to Kastle access data. That figure may feel discouraging at first glance—after all, it’s been nearly three years since our world shifted, and we’re still not even close to being back to normal. Well, something that we don’t talk about enough is that buildings never achieved full occupancy before the pandemic. Even before COVID-19 crept into the world, most occupancy estimates hovered around 75-85 percent at best.

“Low utilization of office space was already a challenge for companies before the pandemic,” noted Tim Venable, Senior Vice President at CoreNet Global. “It’s more critical than ever to have detailed insight on which spaces are being used, how, and when. That information is essential in understanding how to create the right spaces for employees to collaborate and be productive, not to mention in identifying opportunities to optimize the portfolio.”

Occupancy continues to vary widely from city to city (and even building to building), according to data from Kastle. Austin and Houston regularly see occupancy rates above 60 percent, with the busiest office days showing rates as high as 75 percent. Other cities like San Francisco and New York continue to struggle to cross the 50 percent threshold in terms of an average, with the lowest occupancy on Fridays dipping below 30 percent. Universally, Tuesday remains the most popular day to be in the office. “The big question remains: where does weekly occupancy land?” asks Jake Heinz, CMO at Kastle, who digs into this data every week. “Assuming a three-day in-office schedule becomes the norm, the U.S. should level out at a 66 percent occupancy rate.” 

While this context allows some understanding of where the office market is in terms of recovery, it’s critical for portfolios to measure occupancy across their assets and at each building. Without data about who is coming to the office and when, buildings are left to rely on tenants to self-report their hybrid work policy and how actual attendance does or does not follow that corporate rule. The problem is that most companies can’t measure this, leaving them and the buildings where they lease in the dark. 

“Any historical benchmarks about office occupancy and utilization that a company had before COVID-19 are out the window. They don’t apply anymore because employee behavior now is so different,” highlighted Venable. 

The basic occupancy calculation, at the building level, compares traffic through the turnstile to the total occupancy of the building. But as Venable pointed out, understanding the success of efforts to get people back to the office regularly is about more than whether or not they show up. For example, how long are they spending at the office? Are in-office days really focused on collaboration, or are they used for heads-down work instead?

If companies can get this data on their own, that presents an opportunity for buildings to offer additional value to their tenants. Imagine how powerful it would be if a property management team could sit down with a tenant and share insights about space utilization, and how the office experience may differ across the company’s teams? If the marketing team is coming to the office more often than the accounting team, that may be a signal that the space doesn’t meet the needs of the latter group. If a tenant had just shifted furniture and room design to focus on collaboration and openness, the lack of traffic from teams like accounting might signal that the refreshed space design is missing the mark. 

Access control data reveals which spaces are most popular in this new era of hybrid work from the difference in usage of floors dedicated to meetings and collaboration vs. those desk-heavy floors and the success of newly offered amenities. Heinz pointed out, “Originally, companies thought that nicer amenities alone would draw people back. They need data to understand whether those were good investments or not.”

Similarly, another aspect of measuring return-to-office is understanding if the policies, programming, and incentives designed to lure people back to the office are actually working and helping people view in-office days as more productive and engaging. Are more people going to the office when career development or social programming is happening? What’s the impact on attendance if we offer catered meals? Too often, these programs are offered with no way to measure whether or not they work. The same can be said about changes to a company’s hybrid work policy. Does a harder-line policy about spending X number of days in office force action or is an offhand approach more effective?

The crux of return-to-office efforts is about validating what’s working and what’s not when it comes to the office. The debate about the effectiveness of hybrid work is essentially settled; it’s here to stay. People who want to work fully remotely are doing just that, either by bucking their company’s return-to-office policy or by finding a new job that allows them to do what they want. Building teams can help tenants elevate their strategies for reinventing the office by simultaneously reinvigorating their own connections with tenants who may be at risk of churning. The data leads the way forward…

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