The hybrid work model is increasingly more common as formerly remote workers head back to offices for at least part of the week, a shift that's causing fewer headaches for landlords, according to researchers at Oxford Economics.
Citing U.S. Census data and surveys by consulting firm WFH Research, Oxford analysts said the percentage of workers performing remote-only duties — a practice adopted widely out of necessity as the pandemic hit the country in March 2020 — has been declining in most major cities since June 2022.
In Phoenix, the percentage of remote-only workers went from about 41% in June 2022 to 38% in October 2023. At the same time, the percentage fell from 41% to 35% in Dallas, and from 39% to 33% in Philadelphia. The percentage of remote-only workers declined in nine of 14 major U.S. cities.
The reverse trend, toward more remote-only work, was found in markets including Washington, D.C., Boston and San Francisco.
If more workers in a certain metropolitan area "are opting to be hybrid versus fully remote, the negative impact on demand will be less severe,” Oxford Associate Director Abby Rosenbaum said in a report this month.
Rosenbaum said the shift to more hybrid work, coupled with other demand drivers such as employment growth among office users, will paint a clearer picture of office financial performance in coming months. For now, Oxford projects that U.S. office capital values will decline by an average of 16.4% in 2023 and decline another 2.1% in 2024, though city-focused breakdowns have not been determined.
According to security technology firm Kastle Systems, average big-city office attendance has hovered around 50% of pre-pandemic levels for much of the past year, with employers on average requiring workers to spend at least three days in offices during the work week based on its anonymous data from key swipes.