What factors affect the U.S. office market
Townsend Group conducted a study in the segment of commercial real estate in the U.S.. It turned out that within 3-5 years the office market may decline by about 9-12%. The reason for this is the growing popularity of remote formats of work.
During the pandemic, many companies switched to work from home, and initially a number of experts believed that this option would be temporary. However, even after the end of the lockdown, many stayed to work in this format, and both employees and management got used to it. In this regard, it had to reconsider the lease of offices, pay attention to co-working spaces or rent small spaces. During the first survey about 87% of employers considered the remote version of the business as ineffective, but now there are less than 60%. 7% of companies surveyed have already completely switched to operating from home. There are also those who have chosen a hybrid model, with some employees working from the office and another part working from home.
According to analysts Townsend, after some time the number of people who have returned to the office will increase, but the number of working days per week may decrease.
Experts note that there is a growing interest in the office real estate market, but it applies mainly to high quality facilities. Now vacancy of such premises in business centers is increasing and at the same time their prices are going up. The objects located in the suburbs of megalopolises are in the highest demand.
However, the U.S. market has other problems. Since late last year, the number of people in the country who can’t fully pay their rent or mortgage has been growing. That number has reached the 5 million mark, or about 5 percent of all renters and loan originators.
In addition, about 2.2 million renters and 1.2 million mortgage holders are having trouble paying their financial obligations and are unsure if they will be able to make a regular payment next month. At the same time, rates of arrears are down from last June, when people were leaving their homes en masse due to the inability to maintain them. According to official statistics, more than 2.4 million Americans missed their mortgage payments the previous month. People fear forced eviction from rental housing and homes that are on credit.
The reason for this situation was the pandemic, the effects of which are still significantly affecting the country’s economy. The coronavirus outbreak has put more than 9.3 million people out of work and pushed poverty rates to the levels of the 1960s.