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Covid-19 vaccine won’t be immediate cure for office market

Even with vaccine, workers may not return to offices before summer

The Covid-19 vaccine is being distributed across the country, but it won’t provide an immediate cure for office landlords. (iStock)
Covid-19 vaccines are being distributed across the country, but won’t be an instant panacea for office landlords. (iStock)

It’s been a rough year for the office market — and it’s unlikely that the first half of next year will be much better.

Even though Covid-19 vaccines are being distributed across the country, public health and real estate experts believe that a return to the office likely will not happen until late spring or early summer, the Wall Street Journal reports.

Experts say that it will take months for the vaccine rollout to become effective and for employees to reach herd immunity, meaning remote work will continue in the next year and office rents will continue to drop.

The real estate firm CBRE projects that office rents could fall by as much as 8 percent in 2021.

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In the meantime, landlords are dealing with mostly empty offices. An average of about 23 percent of workers in 10 cities had returned to the office the week of Dec. 16, according to Kastle Systems, which tracks access-card swipes. The highest rate since the pandemic was 27.4 percent in mid-October, Kastle said.

Some companies are planning their return to the office in light of the promising vaccine news. In New York, 25 new tenants per week were searching for office space in the first two weeks of December, up from 20 per week in November, according to the data firm VTS.

Many of these companies are considering leasing space from co-working operators such as WeWork and Industrious, according to the Journal.

[WSJ] — Keith Larsen

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