Manhattan lags Chicago, LA in returning to the office
Real estate workplaces have been the most active during pandemic
For all of Wall Street’s drum-beating to march workers back to their desks, Manhattan office buildings have actually been slower to refill than those in Los Angeles and Chicago.
The nation’s three largest office markets were emptied early last year by the coronavirus, but data show attendance varied wildly among those cities and their industries — and still does.
Pandemic lockdowns for all three cities started in the last full week of March 2020, but office use had already plunged the week before as companies proactively sent workers home, according to anonymized data gathered by Brivo, a firm that supplies card-swipe and other technology to 20 million users at 70,000 U.S. locations.
Office Reopening in Chicago, Manhattan, and Los Angeles
By the second week of the cities’ stay-at-home orders, office use in Manhattan had plummeted to just 17 percent of the average for the first quarter of 2020, and in Chicago to 21 percent. Los Angeles was the outlier, with office use dropping only to 41 percent of that benchmark.
In fact, with the exception of a dip to 38 percent in the first week of April, L.A.office use never fell below 41 percent of 2020’s first-quarter average — and rarely below 50 percent — in any non-holiday week for the duration of the lockdown, according to Brivo.
Commuters’ reliance on public transportation in Manhattan and Chicago helps explain their lower office usage during lockdown and their slower return.
Though office use in Manhattan and Chicago generally tracked closely throughout 2020, by the start of this year, Chicago had begun to maintain a small lead in workers returning to their desks.
Between the first week of 2021 and the week of June 28, office use had risen by 27 percent in Chicago but by barely 20 percent in Manhattan. Los Angeles, even with its much higher base, also beat Manhattan’s rate of return, increasing office use by more than 22 percent.
As of the week of July 12, Manhattan remained at just 41 percent of its pre-lockdown office use. Chicago was at 47 percent and L.A. at 66 percent.
The current nationwide surge in Covid-19 cases driven by the highly contagious Delta variant and pockets of anti-vaccine holdouts could lead to new restrictions, but that might not affect return-to-office momentum much. In the first two weeks of December last year, after Los Angeles County reimposed its stay-at-home order to tamp down a new wave of infections, office use in the city actually ticked up.
Real estate workers have been at the vanguard of the push to return to the workplace throughout the pandemic, but the data from Brivo show just how profound an effect the sector has had on the overall statistics of the three big urban markets.
In all three cities, from the start of the lockdowns, real estate professionals were showing up at the office far more often than workers in finance, administration, law, accounting and tech. But the gap in Chicago was especially stark.
While no other sector there has yet recovered more than 32 percent of pre-pandemic office use, within real estate, it never dropped below 60 percent, except for the Christmas holiday. In fact, since late June of 2020, Chicago real estate offices have been busier than before the lockdowns, except for holiday weeks, and have remained above 150 percent of the pre-lockdown average since the end of March this year.
One factor in that surge was that Chicago brokerages expanded during the pandemic in response to the Covid-driven froth in the residential market. By early 2021, the Chicago Association of Realtors reported a 40 percent jump in new members compared with 2019, according to the Chicago Tribune. Chicago-based @properties, which has been in expansion mode nationally, added almost 500 residential agents, with about a third of those having just received their licenses.
Manhattan and L.A. saw similar but less dramatic surges in activity at real estate offices even as other sectors mostly worked from home. Manhattan real estate offices generally averaged almost 93 percent of pre-pandemic activity from the last week of June 2020, while in L.A. the figure was nearly 100 percent.
Real estate workers were entirely responsible for a huge spike in Manhattan office use in May of last year. At a time when New York Gov. Andrew Cuomo’s office was giving confusing guidance on what real estate business could be done in person, there was a scramble back to the workplace at many brokerages. In the last week of May 2020, activity in Manhattan real estate offices reached 224 percent of the pre-lockdown average. That surge effectively doubled overall Manhattan office use in that week.
As of the week of July 12, Manhattan real estate offices were seeing about as much activity as before the lockdowns, while those in L.A. were almost 20 percent busier than before the pandemic. But the overall champ remains the real estate pros in the City of Big Shoulders, with activity at Chicago real estate offices at about 180 percent of the 2020 first-quarter average.