Posted on 01/31/2023 12:16:00 PM PST by FarCenter
Holidays and extreme weather conditions prompted a typical seasonal office demand slowdown in December, according to the VTS Office Demand Index (VODI). However, the year-over-year decline for the month was slightly larger than in previous years.
New demand for office space ended the year 31.3 percent below its May 2022 peak and fell 20.7 percent year-over-year to a VODI of 46 in December. The report said that a tight labor market, layoffs, threats of another COVID-19 variant, and interest rate hikes have “given pause” to prospective office tenants.
Nick Romito, CEO of VTS, said in prepared remarks, “The reality is that the outlook for the U.S. economy is still unknown, and expectations of a recession continue to loom large in 2023. Where the economy heads will be the through-thread for office demand decisions as we head into the new year.” Romito said a silver lining is a significant momentum in return-to-office trends. “Continued momentum in return-to-office will undoubtedly provide a tailwind for office demand in 2023 and beyond,” he said while acknowledging that “realistically, it seems unlikely to ever revert in full.”
A weekly report from Kastle that measures office worker occupancy showed the national average of 49.5% of workers were in the office compared to pre-pandemic. The Kastle measurement has not exceeded 50% since COVID-19 set in.
(Excerpt) Read more at globest.com ...
A little bit of recency bias here, but in general technology was leading to this anyway in some form.
I am trapped in a blue state. My office is in a complex that, pre-Covid, was the place to be for businesses. Now? It is a ghost town. But the businesses are all still here. They still have their office space.
The question I have is this. If those companies instituted back to the office policies, how many of the people who ostensibly work for them in these offices still actually live here? I am betting less than 60% would be able to return as they are now in a Red State.
I would really like to see a lot of corporate real estate convert over to residential apartments. Rent is far too high in many areas, and a big increase in available apartments would help many people.
The commercial real estate collapse is underway.
Covid pushed more and more people into online shopping and home delivery, small businesses went under due to lock-downs and loss of customer base, and larger companies embraced “work from home” policies.
With the current state of the economy I don’t see any recovery in this sector for many years. This also has an impact on small businesses that relied on these office buildings for much of their income (restaurants and lunch for example).
My old office building used to have 500 plus cars in the parking lot on a weekday. Now it is 50 on a good day. One of my favorite small restaurants nearby told me that business is now 1/3rd or less of what it was prior to Covid and they are planning to close.
Same story for all of the big office buildings in my city. Lots of empty parking spaces and small businesses around them are shutting down.
and yet the REITs are hanging in there ...
Who wants to step over feces and dodge bullets to work in a hell hole?
Any CEO of a company in this situation who later ordered staff to return to the office should be fired. Letting your employees work from home and take the cost of their office space and utility costs off the company’s expense sheet Is such a no-brainer that you’d have to be retarded not to see it and take advantage of it.
Administrative staff are rapidly being replaced with technology. Even at the executive level, until you get into the level of executives who have bodyguards... Self service is becoming the standard and the technology is there to make it possible.
Quote: “Any CEO of a company in this situation who later ordered staff to return to the office should be fired. Letting your employees work from home and take the cost of their office space and utility costs off the company’s expense sheet Is such a no-brainer that you’d have to be retarded not to see it and take advantage of it.”
Of course, but the blue state Covid nut, totalitarian governors are starting to figure out that work form home is leading to a large exodus of tax payers. They are starting to pressure companies to require back to the office.
Totally agree on the automation.
I think a lot of people don’t see it. They think burger flippers will be replaced. Cashiers will go away and more kiosks will show up. That sort of thing. But a lot of administrative work can be automated. Insurance. Law offices. All kind of “white collar” jobs can be done with low-level AI (decision systems).
I think unemployment could skyrocket as a whole lot of people (many with college degrees) are found to have nothing of value to offer the labor pool. We don’t need you in the office. In fact, we don’t need you at all.
Some of recent reactions by small business in our area are showing post Covid psychomania. First of all the local business wanted our city/town to keep 2 blocks of main street in Covid closure to vehicles so people could walk/eat, drink and enjoy whatever.
That lasted until the first cool day and rain.
Now, those 2 blocks are open to vehicles to drive, park and walk and shop and eat. The tourists just disappeared except on the weekends after schools reopened. Eating/drinking on a closed street lost its charm post Covid.
A coffee roasting/brewing shop will be moving from its main street home for close to 40 years to a tourist walking area by our downtown river. With a lot of free parking in covered parking, a short walking distance to the river walk area. They feel that they will keep some of the leftover people working in offices downtown and get a good share of the river walking tourists.
Big office complexes all over DC, No. VA, MD are are completely empty.
Malls are empty as well.
All of those empty buildings could be put to good use by converting them into 5 star hotels so that illegals would have a decent place to stay.
“Letting your employees work from home and take the cost of their office space and utility costs off the company’s expense sheet Is such a no-brainer that you’d have to be retarded not to see it and take advantage of it.”
Absolutely! But control freaks and/or those who haven’t learned how to supervise a remote staff panic at the idea.
CINCINNATI (CNN Newsource/WKRC) - The new artificial intelligence program ChatGPT is smart enough to pass prestigious graduate-level exams.
However, the program didn't pass with notably high grades.
The AI program passed four law exams in four classes at the University of Minnesota, and another exam at the University of Pennsylvania Wharton School of Business.
For the University of Minnesota exams, ChatGPT performed on the average level of a C+ student, receiving a low but passing grade in all four exams.
At Penn, an Ivy League school, the AI earned a B to B- grade on the exam.
https://dayton247now.com/news/nation-world/artifical-intelligence-program-passes-university-exams-minnesota-pennsylvania-wharton-school-business-ivy-league-tech-science-school-education-cincinnati-ohio
By the time this year's Freshman class gets to Business School or Law School, AI will beat 90% of them.
I really think we need to start planning for a future in which a big percentage of the population is “useless”.
I don’t think we want to go down the “useless eater” path. That’s a bad path.
I also don’t think we want to warehouse millions of people in urban public housing complexes. That won’t be good.
I don’t know what the real solution is, but if we just “drift into” a future in which almost all the goods and services are delivered by machine, and 300+ million people sit at home, bored, trying to find some excitement ... well, I’ve seen that on the News, and it’s bad.
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