Only about a third of Gap's corporate workforce is commuting to its San Francisco headquarters each week, a lackluster attendance rate the global retailer is aiming to boost as it plans a return to a full five-day workweek.
The company is the latest to join a slew of corporate America heavyweights stepping up their in-person requirements, asking employees who live near one of Gap's offices to come in more frequently as it plans to gradually return to a pre-pandemic schedule by September this year.
“Creativity thrives on in-person collaboration,” a company spokesperson said in a statement. "In an effort to foster an even stronger community across Gap Inc., beginning in February, employees located near an office have begun coming in more frequently with the goal of being back in the office five days a week by the fall.”
The updated requirement applies to all Gap Inc. offices, including its roughly 545,000-square-foot headquarters at 2 Folsom St. as well as its product development hub in New York City. Employees across all of its four major brands — Gap, Old Navy, Athleta and Banana Republic — will have to return to one of the company's offices for all five days by Sept. 2, according to an internal memo earlier reported by the San Francisco Business Times.
Companies across the country are increasingly demanding more in-person time among their employees. Firms such as Amazon, JPMorgan Chase, Starbucks, AT&T, Southwest Airlines and Walmart have recently stepped up their in-person requirements, with many employers now demanding workers commute to an office all five days of the workweek.
While welcome news for many landlords and property owners, San Francisco's longstanding dependence on the tech industry has meant the city has a lot of ground to make up before it recovers some of its biggest pandemic-induced losses.
The city continues to face one of the nation's highest office vacancy rates due to pandemic-induced headwinds. Property valuations have plummeted in recent years, largely because San Francisco has been more impacted by the effects of flexible work than any other market in the United States, according to a CoStar analysis.
Traffic boost
While Gap's offices have been open for a majority of the past half decade, less than 35% of employees based out of the 2 Folsom St. building have been coming in between Tuesday and Thursday, according to company attendance data.
"This creates missed opportunities for collaboration, creativity and community across our company," Gap Inc. CEO Richard Dickson wrote in a recent company email. "We stand at a pivotal next step in our journey to become a high-performing house of iconic brands that shape culture. Which is why our intention moving forward is to be in person, together."
Employees with remote-based roles won't be expected to relocate. Among those that have to start commuting more regularly, Gap Inc. is offering a slew of perks to help ease the transition.
For starters, the company will begin offering three flexible, but not consecutive, weeks per year in which employees will be able to work remotely. They will also have the option to work out of the office on Fridays between the Memorial Day and Labor Day holidays, and will continue to have some flexibility if and when personal circumstances require a day at home or away from a corporate hub.
Tech companies such as Meta, Salesforce, Dropbox, Pinterest, among others that had previously fueled the regional office market have collectively dumped millions of square feet over the past half decade, driving San Francisco's availability rate past 26%, according to CoStar data. In the area surrounding Gap's headquarters, large tenants such as Alphabet's Google and Charles Schwab continue to shrink their real estate footprints, outweighing any incremental progress the city has reported in leasing activity and demand.
With companies such as Gap asking employees to come in more regularly, however, the anticipated boost in foot traffic has been enough to fuel a sense of optimism that the city is on the cusp of a rebound.
Already, leasing activity has been incrementally rising over the past six months, according to CoStar data, hitting its highest volume since 2022.