On-site office work will not die — at least, not if C-suite executives at prominent companies have anything to do about it.
Remote and hybrid work have become entrenched within the post-pandemic U.S. office landscape. But with the health crisis officially deemed over by the federal government, many large, national firms are rolling out strict directives to bring their employees back to the office, Yardi Matrix reported.
It’s not a new trend, per se, as companies have been telegraphing their return-to-work intentions for most of 2023. For example, after announcing last year that Amazon didn’t plan to require employees to come back to the office, CEO Andy Jassy changed tack in February, deciding instead that the company’s new policy mandated three on-site days a week.
Amazon’s new on-site rule went into effect in May and Jassy doubled down on the policy in late August, announcing at an internal event that Amazon workers should get on board with the new requirements or risk their prospects of remaining with the company.
More large conglomerates have jumped on the return-to-office bandwagon in recent months. BlackRock and Disney each require four on-site days a week. Google switched to three in-office days per week last year and, despite pushback, told its workers in June that attendance will be factored into performance reviews moving forward. Meta, which began requiring three days a week on-site in early September, has excised language from its job listings that mentions hybrid work.
The success of such executive-suite initiatives could go a long way toward the overall health of the office market, which continues to struggle. In August, the national average full-service equivalent listing rate was $37.83 per square foot (psf), according to Yardi. That’s down 2.2% year over year. Meanwhile, the national vacancy rate last month was 17.5%, up 260 basis points annually. And sales prices for high-quality properties have plunged, with buildings rated as either Class A+ or A selling for $233 psf this year, down 35% from $361 psf in 2022.
Recent lease signings in fraught, office-heavy markets like Manhattan have provided a glimmer of hope. Amazon, for example, renewed a 210,000-square-foot lease in the borough and added another for 90,000 square feet.